THE  LABOUR  MOVEMENT 
IN  AUSTRALASIA  • 

A  STUDY  IN  SOCIAL-DEMOCRACY 


BY 


VICTOR  S.  CLARK,  PH.D. 


31TY 


NEW  YORK 

HENRY  HOLT  AND  COMPANY 
1906 


COPYRIGHT,  1906 

BY 
HENRY  HOLT  AND  COMPANY 


Published  November \ 


TO 

MANY    FRIENDS    IN    AUSTRALIA    AND    NEW 
ZEALAND,  WHOSE  COURTESY,  HOSPITAL- 
ITY,   AND    ASSISTANCE    HAVE    FUR- 
THERED THE  PREPARATION  OF 
THIS  BOOK. 


1H4081 


PREFACE 

THE  American  Federation  of  Labour  has  re- 
cently advised  the  trade  unions  of  the  United 
States  to  enter  the  next  political  campaign. 
This  action  may  not  revolutionise  our  parties, 
but  nevertheless  the  step  is  significant.  It 
indicates  maturity  of  sentiment  in  favour  of 
political  action  not  hitherto  manifested  by  con- 
servative labour  organisations.  Though  most 
American  unions  have  opposed  socialism,  still, 
considering  current  phases  of  popular  thought, 
they  can  hardly  engage  in  politics  without  mak- 
ing socialist  policies  a  live  issue — perhaps  in  the 
near  future  a  leading  issue — before  our  people. 
Therefore  the  experience  of  the  Australasian 
democracies,  so  closely  resembling  the  United 
States,  where  a  powerful  political  party  has 
been  erected  upon  a  foundation  of  trade  union- 
ism, has  timely  interest  for  Americans. 

This  book  is  an  attempt  to  describe  the  his- 
vii 


viii  Preface 

tory  of  the  political  labour  party  of  Australasia, 
to  analyse  its  policy  and  the  results  of  that 
policy  so  far  as  applied,  and  at  the  same  time  to 
make  clear  the  differences  as  well  as  the  similari- 
ties characterising  those  countries  and  Amer- 
ica, which  must  affect  the  application  to  our 
own  problems  of  their  experience.  I  have  tried 
to  write  from  the  standpoint  of  an  agnostic  in 
social  creeds.  My  observations  were  made  dur- 
ing visits  to  Australia  and  New  Zealand,  in 
1903  and  1904,  under  a  commission  from  the 
Government.  Allusions  to  more  recent  events 
are  based  upon  correspondence  and  printed 
information. 

The  methods  of  social-democracy  in  Austra- 
lasia are  historically  continuous  with  the  meth- 
ods of  political-democracy  in  Great  Britain. 
In  their  struggle  for  civic  freedom,  the  com- 
mons of  England  relied  upon  adjective  rather 
than  substantive  law.  From  the  Magna  Charta 
down,  every  bill  of  rights  wrung  from  the  sov- 
ereign provided  procedure  for  asserting  and 
realising  personal  and  political  liberty,  not  gen- 
eral definitions  of  what  that  liberty  was.  The 


Preface  ix 

measures  by  which  popular  control  was  ex- 
tended were  concrete  measures.  Their  develop- 
ment was  not  symmetrical  and  subordinate  to 
a  preconceived  theory  of  government  or  the 
rights  of  man.  They  were  not  automatic 
checks  upon  arbitrary  authority,  but  means  by 
which  each  citizen  in  maintaining  his  own  rights 
defended  the  rights  of  every  other  citizen. 

The  social-democratic  policy  of  the  colonies 
is  following  a  similar  development.  Austra- 
lasian socialism  is  distinguished  from  Conti- 
nental socialism  by  the  same  features  that  dis- 
tinguish the  Magna  Charta  and  the  Bill  of 
Rights  from  the  crystallisations  of  political 
theory  in  the  documents  of  the  French  Revolu- 
tion. It  has  been  called  a  "socialism  without 
doctrines."  Its  object  is  to  secure  instruments 
by  which  workers  may  control  industry.  It 
seeks  tools  rather  than  proclaims  theories,  and 
does  not  try  to  harmonise  practical  attainments 
with  a  preconceived  ideal  of  society.  There- 
fore the  socialism  of  Australasia  is  unique,  and 
worthy  of  study  as  a  phase — though  still  in- 
complete, and  possibly  not  abiding — of  Anglo- 


x  Preface 

Saxon  history.  Even  more  important  from  a 
practical  standpoint  is  its  revelation  of  the  vital 
forces  directing  the  labour  movement  as  a 

world-wide  phenomenon. 

VICTOR  S.  CLARK. 
WASHINGTON,  D.  C., 
June,  1906. 


CONTENTS 

CHAPTER  PAGE 

I.     THE  COUNTRY  AND  ITS  RESOURCES          .        .         1 
II.     PEOPLE    AND    INSTITUTIONS    ....       16 

III.      WORKINGMEN     AND    TRADE     UNIONS          .  .         48 

•    IV.  THE   POLITICAL  LABOUR  MOVEMENT      .        .       71 

V.  THE   LABOUR   PROGRAMME       ....     101 

VI.  A  WHITE  AUSTRALIA 122 

VII.  MINIMUM  WAGE   BOARDS         .        .        .        .138 

VIII.  INDUSTRIAL   ARBITRATION   ACTS      .        .        .     154 

IX.     JURISTIC    ASPECTS    OF    COMPULSORY    ARBITRA- 
TION       182 

X.     ECONOMIC   AND   SOCIAL   EFFECTS   OF   INDUS- 
TRIAL  REGULATION 212 

XI.     THE  GOVERNMENT  IN  BUSINESS     .        .        .246 
XII.    CONCLUSION   AND  OUTLOOK  281 


THE 

UNIVERSITY 

OF 


THE  LABOUR  MOVEMENT 
IN  AUSTRALASIA 

A  STUDY  IN  SOCIAL-DEMOCRACY 

CHAPTER  I 
THE   COUNTRY  AND  ITS  RESOURCES 

THE  term  Australasia  is  used  to  include  the 
Commonwealth  of  Australia  and  the  Colony  of 
New  Zealand,  lands  separated  by  twelve  hun- 
dred miles  of  water,  but  intimately  connected 
in  social  and  industrial  development.  Both 
countries  lie  largely  in  the,  south  temperate 
zone,  are  peopled  by  a  race  of  almost  pure 
Anglo-Saxon  stock,  and  are  governed  by  elect- 
ive parliaments  modelled  upon  that  of  Eng- 
land. Their  natural  resources  are  broadly 
similar,  though  climatic  differences  exist  great 
enough  to  affect  the  economic  condition,  and 
even  to  be  reflected  in  the  social  condition  of  the 


2     The  Country  and  Its  Resources 

inhabitants.  The  people  have  been  so  drawn 
together  by  their  remoteness  from  other  centres 
of  European  civilisation,  and  by  the  identity 
of  the  public  problems  they  have  had  to  face, 
that  they  are  distinguished  by  close  community 
of  sentiment  and  opinion.  Neither  country 
could  well  be  considered  alone  in  any  account  of 
social  movements  in  which  either  was  concerned. 
Australia  approaches  in  territorial  extent  the 
mainland  of  the  United  States,  though  the  pro- 
portion of  arable  land  is  much  smaller  than  in 
America.  Of  the  two  countries  it  is  relatively 
the  warmer,  having  more  than  one-third  of  its 
area  within  the  torrid  zone.  The  continent 
presents  a  relief  somewhat  like  a  reversed  dinner 
plate.  Along  the  sloping  rim  the  land  is  gen- 
erally fertile  and  well  watered,  and  forested 
with  the  ever-present  but  ever-varied  eucalyp- 
tus. Here  agricultural  industries  thrive  and 
small  homesteads  are  possible.  The  ridge  of 
loftier  country  towards  the  interior  consists  of 
low  ranges  of  coastal  mountains,  from  whose 
highlands  flow  the  streams  that  occasionally 
break  the  even  beach  line  of  the  continent  with 


The  Country  and  Its  Resources     3 

narrow  valleys,  and  whose  waters  brought  down 
the  gold  that  formed  the  placer  deposits  of  the 
early  mining  days.  This  barrier  of  broken 
land  contains  valuable  quartz  lodes  of  the  pre- 
cious metals,  besides  copper,  coal,  and  yet  unde- 
veloped iron  mines.  Beyond  it  sink  the  boundless 
plains  of  the  interior,  extending  into  that 
"Never-Never"  country  which  alternates  be- 
tween the  aridity  of  the  desert  during  drought 
years  and  the  wonderful  fertility  of  rich,  re- 
cuperated fallow  lands  whenever  a  tardy  rain- 
fall comes  to  its  relief.  Gradually,  as  the  re- 
mote interior  is  approached,  grazing  becomes 
scantier.  Large  tracts  of  country  are  covered 
with  drought-resisting  scrub,  or  are  entirely  de- 
void of  vegetation  except  in  the  vicinity  of 
water-holes.  Sometimes  this  waste  area  comes 
even  to  the  coast,  while  in  other  places,  espe- 
cially in  the  southeastern  portion  of  the  conti- 
nent, the  breadth  of  an  empire  separates  the 
desert  from  the  sea.  Country  of  no  value  for 
agriculture  or  grazing  sometimes  contains 
great  mineral  wealth.  The  richest  gold  mines 
of  the  Commonwealth  are  nearly  four  hundred 


4     The  Country  and  Its  Resources 

miles  from  a  constant  water  supply.  The  pos- 
sibilities of  the  continent  have  not  been  meas- 
ured, but  the  portion  that  will  be  permanently 
settled  is  pretty  well  defined.  Probably  over 
half  its  area  will  never  be  profitably  habitable. 

Other  climatic  influences  than  rainfall  affect 
the  distribution  of  population.  The  heat  and 
humidity  of  the  tropical  northern  coast  dis- 
courage or  prevent  manual  labour  by  white  men. 
Europeans  are  employed  as  herdsmen  on  the 
cattle  stations  of  the  interior  plains,  and  labour 
in  the  underground  workings  of  the  highland 
gold  mines  of  northern  Australia.  They  have 
constructed  the  railways  and  other  public  works 
in  that  country.  On  the  sugar  plantations 
they  are  employed  in  machine  cultivation  and  as 
mill  hands.  But  such  occupations  must  be 
either  exceptionally  profitable  or  of  a  tempo- 
rary character  to  attract  white  labour.  Cau- 
casians do  not  engage  in  pioneering  and  home- 
steading,  or  become  permanent  settlers  on  plan- 
tations in  those  latitudes. 

These  climatic  conditions  have  determined 
the  limits  of  present  development  and  the  po- 


The  Country  and  Its  Resources     5 

litical  geography  of  Australia.  The  Com- 
monwealth includes,  besides  the  mainland,  the 
island  state  of  Tasmania,  about  one  hundred 
miles  from  its  southern  coast,  and  the  tropical 
dependency  of  British  New  Guinea,  which  is 
ruled  directly  by  the  Federal  Government. 
Five  of  the  six  states  of  the  Federation  are 
upon  the  continent,  and  their  boundaries  are 
so  arranged  that  no  state  is  exclusively  trop- 
ical or  inland.  While  their  respective  areas 
vary  from  87,884  square  miles  in  case  of  Vic- 
toria, to  975,920  square  miles  in  case  of  West- 
ern Australia,  or  from  a  state  slightly  larger 
than  Minnesota  to  one  approaching  four  times 
the  size  of  Texas,  the  disproportion  in  the 
amount  of  arable  land  they  contain  is  not  re- 
markably large.  In  population  and  developed 
resources,  however,  New  South  Wales  and  Vic- 
toria far  excel  all  the  other  states,  and  contain 
nearly  five-sevenths  of  the  inhabitants  of  the 
Commonwealth. 

Second  only  to  climate  in  determining  the  dis- 
tribution of  settlement,  has  been  the  physical 
conformation  of  Australia.  Climate  has  con- 


6     The  Country  and  Its  Resources 

fined  Europeans  largely  to  the  southern  and 
coastal  portions  of  the  continent.  The  ab- 
sence of  great  iuypr  systems  leading  into  the  in- 
terior, and  the  presence  of  mountain  ranges 
parallel  with  the  sea,  have  also  helped  to  make 
the  people  litoral  dwellers.  A  uniform  coast 
line  and  rare  though  sometimes  excellent  har- 
bours have  caused  the  concentration  of  urban 
population  in  a  few  large  maritime  towns.  The 
absence  of  navigable  streams  of  constant  vol- 
ume is  accompanied  by  the  rarity  of  reliable 
water-power.  Therefore  jn)an^  cities  and 
manufacturing  and  transportation  centres  do 
not  exist  in  Australia.  The  larger  interior 
towns  are  mining  camps  or  rural  trade  markets, 
relatively  unimportant  compared  with  the 
nearest  port  metropolis. 

Although  the  southern  point  of  the  continent 
just  crosses  the  thirty-ninth  parallel,  as  far 
from  the  equator  as  the  city  of  Washington  and 
northern  Virginia,  snow  seldom  falls  at  the  sea 
level,  and  Melbourne  is  as  warm  a  city  in  win- 
ter as  New  Orleans.  Oranges  grow  in  Victoria 
and  almond  trees  blossom  in  midwinter  at  Ade- 


The  Country  and  Its  Resources     7 

laide.     There  are  no  mountains  high  enough  to 
have  perpetual  snow,  though  Mount  Kosciusko, 
in  Victoria,  reaches  an  altitude  of  over  seven 
thousand  feet;  but  except  in  Queensland  snow 
is  not  uncommon  in  the  highlands  during  the 
cold  season,  and  some  of  the  upland  districts  of 
Victoria  and  New  South  Wales  have  winters  as 
rigorous  as  those  of  our  northern  states.     The 
summers    are   characterised   by   extreme   heat, 
with  humidity  on  the  coast,  though  in  the  in- 
terior the  dryness  of  the  atmosphere  and  rapid 
radiation  at  night  help  to  mitigate  the  debili- 
tating effects  of  high  temperatures.     Upon  the^ 
whole,  the  climate  of  the  settled  portions  of  Aus-j 
tralia,    except    Tasmania,    corresponds    more^ 
nearly  with  that  of  our  Gulf  States  and  South-  , 
ern  California  than  of  any  other  part  of  the 
Union.     This  influences  both  social  and  labour/ 
conditions  in  the  Commonwealth. 

Compared  with  other  continents,  the  natural 
resources  of  Australia  are  limited  in  variety, 
but  abundant  within  those  limitations.  The 
fisheries  are  less  extensive  than  those  of  coastal 
Europe  or  America,  though  pearl  fishing  af- 


8     The  Country  and  Its  Resources 

fords  some  employment  and  supports  a  few  set- 
tlements on  the  northern  coast.  The  litoral 
regions  of  all  the  states  contain  forests  of  some 
economic  value.  But  they  lack  the  soft  woods 
used  in  house  construction,  and  these  have  been 
imported.  Railway  ties  and  heavy  timber  are 
exported  from  Tasmania  and  Western  Austra- 
lia. The  agricultural  capabilities  of  Australia 
are  extensive  and  varied,  and  the  area  fitted  for 
cropping  is  probably  much  larger  than  the 
boundaries  of  present  development  indicate. 
But  grazing  will  doubtless  continue  to  be  the 
more  important  rural  occupation.  The  latent 
possibilities  of  mining  cannot  be  measured.  But 
past  experience  and  present  prospects  indicate 
that  Australia  is  very  rich  in  minerals,  and 
that  their  distribution  probably  extends  into 
vast  tracts  of  country  yet  unexplored.  Gold 
and  silver  lead  in  value ;  but  the  industrial  met- 
als— iron  and  copper — abound,  while  ample 
coal  fields  provide  for  their  reduction.  The  lo- 
cal supply  of  fuel  is  sufficient  to  encourage  man- 
ufactures. Raw  materials  and  power  are  at 
hand  for  great  textile,  leather,  and  mechanical 


The  Country  and  Its  Resources     9 

industries  when  the  development  of  the  country 
has  reached  a  stage  encouraging  the  diversion 
of  labour  to  these  pursuits.  At  present  the 
small  population  and  the  speculative  induce- 
ments of  ranching,  prospecting,  and  exploration 
confine  the  attention  of  the  people  largely  to 
primary  production. 

Tasmania  is  an  isolated  and  somewhat  Ar- 
cadian island,  with  a  farming  population  count- 
ing back  for  generations  in  the  same  townships. 
It  has  less  centralisation  of  population  and  less 
speculative  enterprise  than  other  parts  of  Aus- 
tralia. Copper  mining  has  recently  become  an 
important  industry.  Tasmania  raises  apples 
and  pears  for  all  Great  Britain  and  part  of 
northern  Europe  at  certain  seasons.  The 
cooler  climate  and  picturesque  scenery  make  it 
a  summer  resort  and  recreation  ground  for  the 
eastern  states  of  Australia. 

Despite  its  century  and  more  of  settlement 
the  Australian  continent  is  yet  unexplored.  The 
full  possibilities  of  irrigation  and  experimental 
agriculture  have  not  been  tested.  Railway  de- 
velopment has  not  broken  highways  through  the 


io    The  Country  and  Its  Resources 

interior.  The  last  great  land  area  to  be 
occupied  by  civilised  man,  it  is  the  most  depend- 
ent upon  scientific  knowledge  and  organised  in- 
dustrial effort  for  economic  progress. 

New  Zealand  presents  a  marked  contrast  to 
Australia  in  these  respects.  The  remoteness  of 
the  country  was  the  only  obstacle  to  settlement 
and  development,  and  the  compass  of  its  re- 
sources was  easily  determined.  The  climate  is 
equable  and  temperate,  the  rainfall  reliable  and 
sufficient  for  agriculture,  the  interior  accessible 
to  a  coast  provided  with  ample  harbours ;  and  in 
many  places  large  stretches  of  grassy  prairie 
have  invited  occupancy  in  a  country  where 
white  settlers  found  no  enemy,  animal  or  human, 
and  endemic  diseases  were  unknown.  Some 
parts  of  New  Zealand  were  heavily  forested  and 
occupied  by  warlike  natives,  but  even  here  the 
passive  opposition  of  nature  and  the  active  op- 
position of  man  did  little  to  check  exploration 
and  settlement. 

The  colony  consists  of  two  main  islands, 
which  contain  more  than  ninety-nine  per  cent, 
of  its  area,  a  small  grazing  island  to  the  south 


The  Country  and  Its  Resources    1 1 

of  these,  and  a  number  of  unimportant  groups 
in  the  South  Pacific  recently  annexed  by  the 
colonial  government.  The  North  and  the  Mid- 
dle Island  are  the  only  two  of  industrial  impor- 
tance, and  contain  practically  all  the  European 
population.  Their  combined  area  is  a  little 
greater  than  that  of  New  York,  New  Jersey, 
and  Pennsylvania.  These  islands  are  separated 
by  a  strait  so  narrow  that  they  are  practically 
continuous  territory.  They  lie  in  lower  lati- 
tudes than  Australia,  their  southern  limit  pass- 
ing the  forty-seventh  parallel.  Auckland,  the 
most  northern  city,  is  farther  south  than  Syd- 
ney. The  climate  is  cooler  than  that  of  any 
part  of  the  Commonwealth  except  Tasmania,  al- 
though the  insular  position  of  the  country  gives 
it  the  equable  temperatures  of  the  ocean. 
Oranges  mature  and  a  semi-tropical  vegetation 
flourishes  in  the  vicinity  of  Auckland,  while  the 
Middle  Island  is  visited  by  severe  snowstorms 
in  winter,  and  upon  the  misty  plains  of  the 
southern  province  crops  sometimes  fail  to  ripen 
in  the  fields.  It  is  as  far  from  Auckland  to  In- 
vercargill,  at  the  opposite  extremes  of  the  two 


12     The  Country  and  Its  Resources 

islands,  as  from  New  York  to  Jacksonville. 
The  archipelago  forms  a  long  ribbon  of  land, 
trending  southwest,  with  a  backbone  of  moun- 
tain that  crosses  the  central  and  eastern  part  of 
North  Island  and  continues  south  along  the 
western  coast  of  Middle  Island,  where  the  high- 
est peak  reaches  an  altitude  of  twelve  thousand 
feet,  until  the  range  terminates  suddenly  at  the 
sea  in  the  lofty  walls  of  a  series  of  magnificent 
fiords,  which  present  some  of  the  grandest  scen- 
ery in  the  southern  hemisphere. 

The  natural  resources  of  the  colony  are 
chiefly  agricultural  and  pastoral.  Some  dis- 
tricts, especially  in  the  uplands,  are  fit  only  for 
grazing,  and  economic  causes  have  favoured  the 
extension  of  this  industry.  Sufficient  coal  is 
mined  for  domestic  use,  and  even  for  occasional 
export.  Placer  gold  deposits,  worked  by  dredges, 
and  quartz  mines  exist  in  both  the  islands.  But 
the  industrial  metals  are  not  abundant,  and 
no  profitable  iron  ores  have  been  discovered. 
The  fossil  gum  of  the  Kauri  tree  is  dug  for 
varnish,  and  a  wild  native  flax  yields  a  valuable 
fibre  for  export.  The  forests  furnish  excellent 


The  Country  and  Its  Resources     i  3 

building  timbers  for  the  domestic  and  Austra- 
lian market.  There  are  no  important  fisheries, 
in  spite  of  the  broken  coast  line  and  insular  po- 
sition of  the  colony.  Wool,  frozen  meat,  and 
butterjTorm  the  chief  items  of  the  exportjtrade, 
and  contribute  most  largely  to  the  country's 
wealth.  New  Zealand  is  essentially  a  land  of 
rural  industry. 

The  Australians  are  to  some  extent  a  sea- 
faring people,  because  they  inherit  the  instinct 
of  sailors  and  are  forced  by  local  needs  into 
this  occupation.  Hitherto,  however,  their  at- 
tention has  been  turned  landward  by  the  more 
profitable  vocation  of  developing  the  country. 
With  longer  settlement,  the  appropriation  of 
the  natural  wealth  by  individuals  and  corpora- 
tions, and  all  the  lessening  opportunities  of 
older  communities,  the  people  will  probably  de- 
vote their  energies  more  to  navigation,  and 
utilise  their  advantage  of  position  to  secure  a 
larger  share  of  the  growing  commerce  of  the 
Pacific.  The  promise  of  maritime  power  might 
almost  be  counted  among  the  natural  resources 
of  Australasia. 


14    The  Country  and  Its  Resources 

Here,  then,  is  a  people  occupying  more  than 
three  million  square  miles  of  territory,  of  which 
probably  a  third  will  support  a  fairly  dense 
population  and  the  remainder  will  offer  in  the 
future  isolated  centres  for  very  profitable  de- 
velopment. These  lands  command  a  sea  area 
that  gives  them  virtual  command  of  the  South 
Pacific  and  part  of  the  Indian  Ocean.  They 
are  near  to  the  crowded  marts  of  Asia.  They 
contain  most  of  the  raw  materials  necessary  to 
supply  the  complex  needs  of  modern  civilisation. 
New  Zealand  and  Australia  supplement  each 
other.  That  colony  and  Tasmania  are  a  gran- 
ary for  the  mainland  in  time  of  need.  Metals, 
fuel,  and  facilities  for  manufacturing  lacking  in 
the  insular  countries  are  abundant  on  the  con- 
tinent. In  many  respects  Australasia  could 
become  as  self-contained  as  the  United  States. 

The  nation's  future  depends  upon  the  use 
made  of  these  advantages.  They  are  too  great 
to  remain  unutilised.  The  people  cannot  leave 
their  talent  wrapped  in  a  napkin.  But  they 
are  now  embarrassed  by  a  problem  of  method. 
Like  the  Americans,  the  Australasians  believe 


The  Country  and  Its  Resources     1 5 

it  their  task  to  make  the  desert  blossom  like  ,-i 
garden,  turn  trails  into  highways,  log  cabins 
into  mansions,  and  villages  into  cities.  But 
while  Americans  have  gone  ahead  as  individuals 
to  accomplish  this  purpose,  the  Australasians, 
who  started  later,  have  begun  with  an  awakened 
social  consciousness.  Therefore  a  conflict  of 
ideals  has  arisen.  Partisans  of  individual  en- 
terprise desire  that  every  man  shall  have  a  free 
hand  in  developing  the  country.  But  the 
party  with  a  different  ideal  proposes  that  so- 
ciety as  an  organised  body  shall  undertake  this 
task,  tolerating  the  individual,  if  at  all,  only 
provisionally.  The  struggle  between  these  two 
policies  is  now  at  its  height,  and  is  a  funda- 
mental issue  in  the  labour  movement. 


CHAPTER  II 
PEOPLE  AND  INSTITUTIONS 

American  Revolution  indirectly  caused 


the  colonisation  of  Australia.  Prior  to  that 
event  British  convicts  had  been  sent  to  the 
southern  plantations,  and  when  this  transpor- 
tation ceased  the  authorities  sought  another 
place  for  their  disposal.  The  recent  discover- 
ies of  Captain  Cook  directed  attention  to  Aus- 
tralia, which  was  chosen  as  the  site  of  the  new 
settlement.  The  first  party,  of  over  one  thou- 
sand prisoners  and  guards,  arrived  in  Janu- 
ary? 17&&  —  the  year  before  the  first  president 
of  the  United  States  was  inaugurated  —  and 
after  pausing  at  the  original  destination  of 
Botany  Bay,  discovered  and  occupied  the 
shores  of  the  adjacent  magnificent  harbour  of 
Sydney.  The  colony  was  re-enforced  by  ac- 
cessions of  convicts  from  England,  anji  in  1793 
free  immigrants  began  to  arrive.  After  en- 
16 


People  and  Institutions  17 

countering  the  usual  hardships  and  struggles 
of  pioneers  in  a  strange  and  remote  land,  set- 
tlement began  to  spread,  and  a  population  of 
freemen  and  freedmen  took  root  in  this  new 
home. 

A  majority  of  the  convicts  were  ordinary 
criminals ;  but  there  were  among  them  people  of 
character — gentlemen  transported  for  political 
offences,  and  others  who  had  violated  laws 
long  since  obsolete.  They  included  trade  union 
leaders  convicted  under  the  old  statutes  against 
conspiracy,  notably  the  Dorchester  labourers, 
transported  for  organising  the  agricultural 
workers  of  England.  It  is  to  be  inferred,  how- 
ever, that  skilled  artisans  and  persons  accus- 
tomed to  regular  labour  were  not  numerous 
among  the  prisoners.  They  were  gathered 
mostly  from  the  towns  and  cities,  and  were  gen- 
erally kept  together  in  barracks  and  stations 
after  their  arrival  in  Australia.  So  the  habit 
of  town  life  remained  with  them. 

Convicts  did  the  manual  labour  of  the  nascent 
colony.  After  an  employing  class  arose  they 
were  hired  out  to  private  landholders.  From 


1  8  People  and  Institutions 

the  first,  therefore,  they  were  an  offence  to  free 
workers.  Even  released  convicts  resented  the 
competition  of  their  former  comrades  in  the 
labour  market.  The  prejudices  thus  created 
lasted  as  long  as  transportation  continued,  and 
even  affect  the  present  immigration  policy  of 
the  government. 

rinfii'nigfrrnfiftn   of  the  convict  stations 


was  necessarily  autocratic.  They  were  under 
a  military  governor,  whose  powers  combined  the 
authority  of  a  commander  with  those  of  a 
prison  warden.  When  settlement  began  to  ex- 
tend, it  was  largely  through  grants  of  land  to 
former  officers  of  marines,  who  worked  their 
estates  with  convict  labour  under  military  disci- 
pline, and  themselves  remained  in  sentiment  as 
well  as  fact  subordinate  to  their  old  commander. 
The  civilian  spirit  was  therefore  slow  to  per- 
meate the  structure  of  colonial  government. 
For  thirty-seven  years  military  courts  were 
the  sole  dispensers  of  justice.  Local  au- 
tonomy of  plantations  and  parishes  could 
not  be  allowed  where  many  of  the  free 
citizens  were  only  recently  or  provision- 


People  and  Institutions  19 

ally  released  from  prison,  and  most  labour 
was  performed  by  persons  still  under  penal 
restraint.  But  if  the  settlers  did  not  partici- 
pate in  the  government,  neither  were  they  taxed 
for  its  support.  Roads  and  other  public  im- 
provements were  built  by  the  convicts.  The 
cost  of  administration  was  paid  by  the  home 
authorities.  New  South  Wales  did  not  become 
self-supporting  until  forty  years  after  its  estab- 
lishment. Supplies  were  brought  to  the  col- 
ony by  transports  and  naval  vessels.  For  some 
years  released  prisoners,  cultivating  their  own 

holdings,  drew  provisions  and  supplies  from  the 

I* 
public     stores.     Even     free    immigrants    soon 

learned  to  accept  centralised  government  and  to 
depend  upon  the  authorities  for  labour  and 
support. 

Australia's  inheritance  from  convict  days  is 
political  and  social,  rather  than  individual.  A 
thriving  population  in  a  new  country  cleanses 
itself  like  flowing  water  from  the  impurities 
of  its  source.  If  criminal  tendencies  predomi- 
nated among  many  of  the  early  settlers,  these 
have  been  eliminated  until  the  people  are  now 


2O  People  and  Institutions 

more  law-abiding  than  Americans.  Convict 
transportation  entirely  ceased  in  all  the  colonies 
but  Western  Australia  when  the  population  of 
Australia  was  about  one-eighth  what  it  is  at 
present.  It  never  existed  in  Victoria,  South 
Australia,  and  New  Zealand.  The  dispropor- 
tion of  males  among  the  prisoners,  and  the  con- 
ditions attending  their  confinement  or  assign- 
ment to  contractors,  prevented  their  adding 
greatly  to  the  increase  of  population.  But  the 
political  and  social  effect  of  their  presence,  and 
of  institutions  shaped  with  convict  transporta- 
tion in  view,  determined  the  character  of  the 
government  during  the  formative  period  of-co?. 
lonial  life,  influenced  the  public  land  policy,  and 
modified  conditions  of  rural  industry  and  terms 
of  employment. 

The  influence  of  penal  settlement  is  not  to  be 
measured  by  its  positive  effects  alone,  but  also 
by  the  reaction  it  caused  in  public  sentiment. 
The  convict  station  ideal  of  a  colony  called 
forth  its  reverse,  the  conception  of  a  new  state 
where  only  the  best  elements  of  society  should 
be  gathered,  where  moral  salubrity  should  char- 


People  and  Institutions  21 

acterise  the  condition  of  the  people,  where  gov- 
ernment should  regulate  for  the  exclusion 
rather  than  for  the  reception  and  control  of 
social  outcasts.  Such  a  conception  was  evolved 
in  the  mind  of  Gibbon  Wakefield,  a  settler  of 
education  and  ability  whom  a  youthful  escapade 
had  brought  under  the  restraints  of  the  law 
without  giving  a  criminal  disposition.  Wake- 
field's  theory  of  colonisation,  which  he  devel- 
oped in  various  pamphlets  and  published  arti- 
cles, helped  to  shape  the  conditions  under  which 
both  South  Australia  and  New  Zealand  were  set- 
tled. This  theory  contemplated  the  founding 
of  colonies  as  a  conscious  and  deliberate  na- 
tional undertaking,  for  the  purpose  of  creating 
an  ideal  state.  Convicts  were  to  be  excluded, 
and  settlers  chosen  with  a  view  to  their  fitness 
for  the  needs  of  an  infant  community.  The 
government  should  possess  local  autonomy,  on 
the  assumption  that  the  political  requirements  of 
colonial  life  could  only  be  known  to  those  experi- 
encing them.  Finally — and  this  economic  the- 
ory had  an  important  effect  upon  the  actual  at- 
tempts to  carry  out  these  ideas — the  land  of  the 


22  People  and  Institutions 

colony  should  be  public  property,  administered 
for  the  welfare  of  the  State.  This  land  was  to 
be  sold  for  a  "sufficient  price,"  which  was  vari- 
ously fixed  at  different  times  and  places,  with 
two  purposes  directly  in  view — to  provide  a 
fund  for  public  works  and  assist  settlers  of  the 
labouring  class  to  emigrate ;  and  to  prevent  la- 
bourers from  obtaining  land  with  such  facility 
that  their  services  would  be  withdrawn  from 
wage-earning  occupations,  and  capitalists  thus 
deterred  from  making  investments  in  local  un- 
dertakings. Wakefield's  plan  of  colonisation 
was  therefore  essentially  regulative — an  at- 
tempt artificially  to  create  economic  and  social 
adjustments  that  in  older  communities  are  the 
resultant  of  complex  natural  forces.  Although 
the  scheme  was  a  partial  failure  in  operation,  it 
placed  a  birth-mark  upon  South  Australia  and 
New  Zealand. 

In  both  these  colonies  the  selection  of  early 
settlers  left  little  to  be  asked.  Most  of  them 
came  to  a  new  land  of  their  own  initiative. 
Many  possessed  capital  and  culture.  The  Dun- 
edin  Colony,  in  New  Zealand,  was  composed  of 


, 


People  and  Institutions  23 

Scotch  Free  Kirk  people,  and  Christchurch, 
in  the  Canterbury  district,  was  settled  by  the 
Church  of  England.  While  the  pioneers  of 
South  Australia  were  not  drawn  to  the  same 
extent  from  any  single  religious  community, 
they  represented  rather  more  than  the  average 
intelligence  and  enterprise  of  the  English  mid- 
dle classes. 

The  public  lands  of  Australasia  have  been 
administered  under  a  variety  of  different  poli- 
cies and  statutes,  but  in  every  instance  with 
identical  results.  Large  estates  and  land  mo- 
nopolies have  characterised  the  country.  Eco- 
nomic and  social,  as  well  as  political  causes, 
account  for  this.  Relatively  to  the  occupied 
area,  a  very  large  proportion  of  both  Australia 
and  New  Zealand  is  suitable  only  for  grazing. 
The  natural  market  for  the  products  of  the 
land  is  Europe.  In  competition  with  the  two 
Americas,  Australasia  has  always  laboured  un- 
der the  disadvantage  of  its  great  distance  and 
consequently  higher  freights.  For  this  reason 
the  country  could  market  profitably  only 
products  of  large  value  in  proportion  to  their 


24  People  and  Institutions 

bulk   and   weight.     Until   recently,   since   cold 
storage  has  been  perfected,  fresh  meat,  butter, 
and  other  perishable  produce  could  not  be  ex- 
ported.    Therefore  bj_a  process  of  elimination, 
as  well  as  on  account  of  special  naturaLacj- 
vantages,  the  people  resorted  to  raising_wooL 
England's    expanding   textile   industries   made 
the  demand  for  that  commodity  certain.     Like 
tobacco  in  colonial  Virginia,  it  was  a  cash  crop. 
In  the  mild  climate,  no  housing  for  sheep  was 
necessary.    The  only  capital  required  was  the 
flock  itself.     Few  natural  enemies  existed.     In 
the  interior  and  on  the  uplands  pasturage  was 
open  and  plentiful,  and  during  normal  years 
sufficient  water  was   accessible.     The  task  of 
herding  sheep  was  not  arduous,  nor  did  it  re- 
quire  adept   ability,   advantages  in   a   climate 
that  does  not  invite  to  strenuous  exertion  and 
where  labourers  were  recruited  from  unskilled 
and  mostly  inexperienced  workers.     The  life  of 
the  bush  and  plains,  free  from  social  restraints 
and  where  the  past  is  forgotten,  appealed  to 
many   of  the   early   settlers.     The   population 
was  small,  and  the  immigrants  not  a  land-hun- 


People  and  Institutions  25 

gry  peasantry,  such  as  has  swarmed  from  Eu- 
rope to  America — coming  to  till  farms.  Con- 
sequently flocks  multiplied  faster  than  the  peo- 
ple, and  vast  sheep  stations  spread  over  the 
country  far  more  rapidly  than  the  slow-going 
government  facilities  for  land  registration  and 
control. 

The  irregular  occupation  of  the  public  do- 
main that  followed  gave  the  temporary  holders 
their  title  of  "squatters,"  a  word  borrowed  from 
England,  where  it  was  applied  to  unauthorised 
occupiers  of  the  commons.  It  has  a  different 
meaning  in  the  colonies  from  that  familiar  to 
Americans.  In  Australia  it  denotes  wealth  and 
.influence,  as  well  as  the  occupation  of  a  pas- 
toralist,  and  no  longer  suggests  a  formal  flaw 
in  the  holder's  title  to  his  estate. 

The  early  private  land  grants  in  New  South 
Wales  were  made  directly  by  the  governor,  but 
in  1831  sale  by  auction  was  introduced,  in  con- 
nection with  a  system  of  pastoral  leases.  After 
1840  half  the  proceeds  from  the  sale  of  public 
lands  were  required  to  be  spent  in  assisting  im- 
migration, and  half  to  pay  for  public  works. 


26  People  and  Institutions 

Provision  was  made  in  184£  for  three  land  dis- 
tricts, which  later  became  New  South  Wales, 
Victoria,  and  Queensland.  By  an  imperial  act 
of  1847,  squatters  were  given  the  option  of 
leasing  the  lands  they  had  appropriated,  with 
a  privilege  of  purchase  at  the  end  of  a  term  not 
exceeding  fourteen  years.  Knowing  that  the 
government  would  not  dispossess  them,  they 
generally  refrained  from  making  leases  until 
the  inflow  of  population  attending  the  gold  dis- 
coveries, when  they  hastened  to  establish  legal 
title  to  their  holdings. 

Although  the  history  of  land  occupation  and 
tenures  varied  in  the  other  states  and  New 
Zealand,  and  a  vast  amount  of  legislation  upon 
the  subject  was  subsequently  enacted,  the  agra- 
rian question  was  everywhere  serious  by  the 
middle  of  the  century.  An  immense  vested  in- 
terest in  large  holdings  had  been  created.  The 
antagonism  between  the  squatter  and  the  ag- 
ricultural settler  had  arisen.  The  pastoralists 
controlled  the  government  in  their  own  interest, 
and  land  was  not  granted  to  promote  settle- 
ment. Until  very  recently,  in  Western  Aus- 


People  and  Institutions  27 

tralia,  no  system  of  free  allotments  to  home- 
steaders, under  government  survey,  with  resi- 
dential requirements  depriving  this  privilege  of 
its  speculative  features,  has  ever  been  at- 
tempted. The  land  laws  of  the  colonies  have 
consistently  disregarded  the  interests  of  the  la- 
bourer and  the  man  without  capital. 

Those  leaseholders  who  did  not  secure  free- 
hold titles  to  their  estates  fought  stubbornly, 
with  all  their  great  influence  in  the  colonial  par- 
liaments, the  efforts  of  the  public  to  dispossess 
them  in  order  to  make  way  for  closer  settlement. 
This  struggle  gave  a  precedent  to  the  later 
policy  of  resuming  private  estates  against  the 
will  of  the  owners.  The  agricultural  possibili- 
ties of  Australasia  were  systematically  ma- 
ligned by  persons  interested  in  maintaining  pas- 
toral leases  of  arable  territory.  For  years  the 
sheep  and  cattle  men  of  the  Darling  Downs,  now 
one  of  the  fairest  tracts  of  farming  land  in 
Australia,  stoutly  maintained  that  the  ground 
1  would  not  grow  a  cabbage.  An  incident  is  re- 
\lated  of  an  old  squatter,  who  left  his  estate  in 
charge  of  an  enterprising  young  manager  dur- 


28  People  and  Institutions 

ing  a  trip  to  England.  On  his  return  he  found 
thrifty  fields  of  oats  growing  where  formerly 
were  wild  grasses.  He  ordered  the  ripening 
crops  burned  immediately,  lest  they  should 
bring  agricultural  settlers  to  the  neighbour- 
hood. 

The  population  that  flowed  into  Australia  so 
freely  during  the  gold  rush  was  composed  of 
.men  bent  on  making  a  quick  fortune  and  leav- 
ing the  country.  At  first  they  did  not  think  of 
acquiring  estates.  During  the  railway  de- 
velopment that  followed,  when  lands  still  owned 
by  the  government  might  have  been  rendered 
accessible  to  farmers,  the  interest  of  the  great 
proprietors  was  often  sufficient  to  direct  these 
enterprises  to  their  own  benefit.  They  prom- 
ised ready  freight  and  got  the  railroads.  In- 
tending settlers  wishing  to  occupy  distant  pub- 
lic lands  could  promise  future  business  but  no 
immediate  returns.  So  conditions  that  caused 
a  subdivision  of  land  in  California,  only 
strengthened  the  pastoralists  of  Australasia  in 
their  property  rights  and  political  influence. 

The  conditions  thus  established  have  contin- 


People  and  Institutions  29 

ued  until  to-day.  The  land  laws  have  been 
modified  in  the  interest  of  closer  settlement,  but 
the  large  estates  remain.  Much  more  than 
one-half  of  the  occupied  land  in  New  Zealand 
is  in  tracts  of  over  ten  thousand  acres,  and  only 
about  one-fifth  is  in  holdings  of  less  than  640 
acres.  One-half  of  the  occupied  land  in  New 
South  Wales  is  in  holdings  of  over  five  thousand 
acres.  In  that  state  about  one-half  of  the  pri- 
vate land  is  owned  by  738  persons  or  institu- 
tions ;  in  South  Australia  by  1,283 ;  and  in  New 
Zealand  by  less  than  500  holders.  Similar  sta- 
tistics are  not  available  from  other  states,  but 
it  is  safe  to  assume  that  those  quoted  are  fairly 
representative  for  all  Australia. 

The  monopolisation  of  the  arable  land  adja- 
cent to  transportation  routes  by  pastoralists 
reduced  to  a  minimum  its  power  to  absorb  popu- 
lation. This  favoured  the  growth  of  cities  in  a 
new  and  undeveloped  country,  and  fostered 
what  Gibbon  Wakefield  sought  to  obtain,  a 
wage-earning  population  as  large  in  proportion 
to  the  whole  number  of  inhabitants  as  in  the 
older  states  of  Europe.  A  reflex  effect  has  been 


30  People  and  Institutions 

that  country  people  have  not  recruited  the  city 
artisan  class,  and  the  frugal,  hard-fisted  spirit 
of  the  farmer  has  not  influenced  industrial 
workers.  Small  freeholders,  with  their  conserv- 
ative interests,  are  in  a  political  minority.  The 
herdsmen  and  shearers  of  the  stock  ranches  are 
wage-earners  and  trades  unionists.  Socialism 
and  land  nationalisation  do  not  threaten  them. 
Wages  are  lower,  because  labourers  have  not 
been  drawn  away  from  hired  service  by  the  op- 
portunity to  become  their  own  employers  on  a 
homestead.  Unemployment  has  been  greater, 
because  no  farmer's  boys  have  left  the  crowded 
labour  market  for  their  home  in  the  country  in 
times  of  industrial  depression. 

Much  British  capital  has  been  invested  in 
pastoral  pursuits,  and  ideas  of  manorial  dig- 
nity were  early  brought  to  the  colonies  from  the 
mother  country.  One  of  the  earliest  projects 
for  a  constitution  submitted  in  New  South 
Wales  provided  for  a  colonial  nobility,  formed 
of  landholders,  who  should  constitute  the  upper 
house  of  parliament.  Tenancy  laws  contain 
provisions  favouring  the  landlord  that  were 


People  and  Institutions  31 

long  ago  abolished  in  America,  and  date  back 
to  feudal  precedents.  The  landlord  can  de- 
strain  the  chattels  of  his  tenant  for  rent  de- 
spite the  prior  claim  of  a  mortgagee.  The  lat- 
ter cannot  sell  stock  from  his  farm  without  the 
consent  of  his  landlord.  The  tenant's  right  to 
improvements  is  equally  limited.  These  laws 
encourage  holding  land  for  rental  purposes. 
Whole  suburbs  of  Sydney  pay  ground  rent  to  a 
single  proprietor.  The  Australian  landowner 
leases  to  tenants  where  an  American  would  sub- 
divide and  sell  his  holdings.  The  labour  party 
protests  against  these  laws  in  its  political  plat- 
forms, and  they  foster  socialist  sentiment  in 
both  town  and  country.  A  tenant  who  has 
built  a  home,  or  otherwise  improved  a  leasehold, 
is  predisposed  to  question  the  rights  of  capital 
represented  in  his  landlord — who  at  the  expira- 
tion of  the  lease  may  claim  the  product  of  the 
renter's  industry.  But  the  freeholder,  however 
small  his  equity,  considers  himself  a  capitalist. 
His  occupancy  is  not  transient.  The  product 
of  his  labour  does  not  pass  by  course  of  law  into 
the  possession  of  another.  His  interests  be- 


32  People  and  Institutions 

come  more  conservative  with  each  payment  on 

his  property,  while  the  tenant  has  less  at  stake 

in  existing  conditions  as  his  lease  draws  to  a 

//close.     Land  ownership,  which  is  everywhere  an 

/  antidote  for  radical  economic  theories,  is  not 

/  |   diffused  in  Australia. 

A  close  connection  has  always  existed  be- 
tween the  land  and  immigration  policies  of  the 
colonial  governments.  As  soon  as  large  es- 
tates were  founded,  the  prisoners  began  to  be 
regarded  as  a  source  of  labour  supply.  Pas- 
toralists  strove  to  maintain  convict  transporta- 
tion as  long  as  possible,  in  the  face  of  vigorous 
opposition  from  other  classes  in  the  colonies. 
In  Western  Australia  the  landholding  council 
voluntarily  invited  convict  settlement  after 
twenty  years  of  free  labour.  The  struggle  to 
abolish  the  penal  labour  system  left  among  the 
working  people  a  class  sentiment  hostile  to  all 
immigration.  Before  transportation  ceased, 
the  policy  of  devoting  half  the  proceeds  from 
the  sale  of  public  lands  to  assisting  immigrants 
was  well  established.  The  law  was  so  ad- 
ministered as  to  create  an  abundant  labour  sup- 


People  and  Institutions  33 

ply,  nol  a  self-dependent  rural  population.  So 
the  assisted  immigrant  was  dumped  into  a  la- 
bour market  already  congested,  to  find  em- 
ployment as  best  he  could.  Nothing  was  far- 
ther from  the  minds  of  the  squatters  than  that 
he  should  become  an  independent  farmer. 
Therefore  the  newcomers  were  not  clearing 
fields,  increasing  the  production  of  raw  ma- 
terials and  the  consumption  of  manufactured 
goods,  and,  like  European  immigrants  to  the 
United  States,  absorbing  more  hired  service 
than  they  furnished.  Government  aid  was  \ 
given  persons  likely  to  become  a  public  charge 
in  England,  not  to  those  with  means  to  live  at 
home.  These  immigrants  were  seldom  agri- 
culturalists. They  began  to  leave  England  at 
the  time  of  the  Chartist  agitation  and  the  bread 
riots.  They  arrived  in  a  new  country  without 
other  capital  than  their  skill  or  strength,  and 
with  no  disposition  to  employ  these  in  unaccus- 
tomed occupations.  So  they  stayed  in  the 
cities  where  they  landed.  As  early  as  1851,  be- 
fore the  gold  excitement,  Sydney  already  con- 
tained one-fourth  of  the  inhabitants  of  New 


v-X 

OF  THE  X 


OF  THE 

i    UNIVERSITY 

\  OF  / 


34  People  and  Institutions 

South  Wales.  Therefore  the  newcomers  de- 
pressed wages  and  increased  unemployment. 
The  working  people  naturally  opposed  this  im- 
portation of  competing  labour  with  the  aid  of 
government  funds. 

The  system  of  assisting  immigrants  had  a 
selective  influence  upon  the  present  population 
of  Australasia.  That  population  is  still  less 
than  five  million.  Incomplete  returns  show  the 
number  of  immigrants  introduced  wholly  or 
partly  at  the  expense  of  the  State  to  be  over 
761,000.  The  descendants  of  these  people, 
therefore,  constitute  a  very  large  fraction  of 
the  present  inhabitants.  As  assistance  was 
given  only  to  British  subjects,  Australasia  is 
peopled  by  an  almost  pure  British  stock.  Three- 
fourths  of  the  inhabitants  were  born  in  the  colo- 
nies, and  four-fifths  of  the  remainder  are 
natives  of  the  British  Islands.  This  homogene- 
ity of  population  has  some  pleasant  and  desir- 
able results.  National  energy  is  not  absorbed 
in  assimilating  foreigners.  Uniform  stand- 
ards of  conduct  and  living  are  easily  main- 
tained. The  community  of  sentiment  among 


People  and  Institutions  35 

the  people  is  strong.  The  consciousness  of  na- 
tional kinship,  the  collective  family  spirit,  is 
greater  than  in  America,  and  for  this  reason 
communal  sympathies  are  more  active,  and  the 
socialist  tendency  more  pronounced.  But  this 
is  at  the  cost  of  some  national  inbreeding,  and 
at  the  sacrifice  of  the  virility  and  aggressive 
energy  begotten  by  the  fusion  of  kindred  races, 
and  of  the  greater  amount  of  variation  and 
wider  scope  for  natural  selection  in  nation 
building  that  the  mingling  of  different  peoples 
causes. 

The  mental  attitude  of  an  assisted  immi- 
grant might  be  that  of  a  taker  of  charity,  or  of 
a  man  paid  his  expenses  for  his  services.  In 
either  case  he  looked  to  the  State  for  something 
further  on — continued  assistance  or  employ- 
ment. He  probably  felt  that  a  country  so 
eager  for  men  as  to  bring  them  six  months' 
journey  from  home,  had  some  occupation  to 
offer  on  their  arrival.  If  he  were  disappointed 
in  this  expectation,  and  found  unemployment 
and  distress  facing  him  in  Australasia,  he  had 
a  right  to  complain.  His  grievance  was 


36  People  and  Institutions 

against  the  government.  He  looked  at  once, 
and  with  justice,  to  government  remedies  for 
his  industrial  hardships. 

Compare  this  Australasian  with  the  average 
immigrant  to  the  United  States,  and  the  con- 
trast helps  to  explain  their  different  atti- 
tudes towards  government.  The  immigrant  to 
America  is  usually  more  self-dependent  than  his 
neighbours  in  Europe,  a  man  dissatisfied  with 
the  restraints  and  limitations  of  the  Old  World, 
who  trusts  to  his  own  energies  to  escape  from 
them.  Family  ties  mean  less  to  him  than  to  the 
boy  who  remains  with  his  parents.  Even 
though  theoretically  a  socialist,  he  is  practi- 
cally an  individualist.  This  immigrant  meets 
strange  tongues  and  institutions  in  his  new 
home,  and  learns  to  stand  alone  more  than  be- 
fore. Alienated  from  the  social  environment 
of  his  birthplace,  and  always  half  an  alien  in 
his  adopted  land,  he  in  some  respects  remains  a 
man  without  a  country.  His  courses  are  self- 
determined.  He  does  not  revolve  about  a  gov- 
ernment. Laws  have  not  the  sacredness  of 
ancestral  traditions,  but  become  mere  social  con- 


People  and  Institutions  37 

ventions.  He  looks  to  himself,  and  not  to  so- 
ciety, for  support  and  direction.  It  is  not 
strange  then,  that  in  America,  independence; 
and  in  Australasia,  interdependence,  should 
characterise  the  popular  attitude  toward  po- 
litical and  economic  problems. 

In  Australasia  the  construction  of  highways 
and  other  public  works  has  remained  a  func- 
tion of  the  central  government  since  the  days  of 
convict  labour.  When  railways  were  demanded 
the  government  undertook  these  enterprises  for 
two  reasons — they  were  an  extension  of  trans- 
portation routes  already  built  and  controlled  by 
the  public,  supplementing  but  not  superseding 
the  state  wagon  roads  ;  and  the  colonial  authori- 
ties could  borrow  capital  for  these  undertak- 
ings at  better  rates  than  private  corporations. 
But  in  undeveloped  countries  like  Australia  and 
New  Zealand,  building  public  works  and  carry- 
ing commodities  are  among  the  principal  occu- 
pations of  the  people.  Production  is  confined 
largely  to  raw  materials,  which  are  exported, 
and  consumption  is  supplied  by  manufactured 
goods  made  in  other  countries.  The  govern- 


38  People  and  Institutions 

ment,  in  supplying  transport  service  for  the 
inflow  and  outflow  of  these  commodities, 
has  become  the  largest  employer  in  the 
colonies.  Working  people  therefore  view 
the  State  under  the  dual  aspect  of  an 
industrial  and  a  political  superior.  When 
the  industrial  functions  of  government  are  ac- 
cepted in  principle,  it  is  easy  to  extend  them 
in  detail ;  and  State  control  of  all  industries 
becomes  a  practical  issue  without  a  revolution  in 
accepted  ideas.  Furthermore,  labour  grievances 
are  the  direct  concern  of  the  State  in  its  relation 
as  an  employer.  Large  bodies  of  workmen  can 
modify  their  terms  of  employment  only  by  po- 
litical agitation  and  legislative  action.  The 
custom  of  appealing  to  the  government  to  de- 
cide industrial  disputes  to  which  it  is  a  party, 
makes  it  easier  to  recur  to  the  same  authority 
to  fix  labour  conditions  in  private  employment. 
During  the  decade  ending  with  1860  parlia- 
mentary government  was  granted  to  all  of  the 
colonies  except  Western  Australia.  Both  legis- 
lative and  executive  authority  were  previously 
vested  in  a  royal  governor,  assisted  by  an  ad- 


People  and  Institutions  39 

visory  council,  who  exercised  mild  but  almost 
despotic  sway  in  the  name  of  his  sovereign. 
When  representative  institutions  were  estab- 
lished, the  governors  were  retained  with  less- 
ened prerogatives,  and  the  governor's  council 
became  the  upper  house  of  parliament.  The 
constitution  of  this  body  was  but  slightly  modi- 
fied. Prior  to  the  introduction  of  popular  gov- 
ernment, it  had  been  composed  of  higher  officials 
and  a  few  wealthy  citizens  of  the  colony.  The 
latter  were  usually  squatters.  In  New  South 
Wales,  Queensland,  and  New  Zealand,  the  mem- 
bers of  the  upper  house  are  still  appointed  by 
the  governor,  and  in  the  two  former  states  hold 
office  for  life.  Until  1891  the  appointment  in 
New  Zealand  was  for  life ;  and  members  of  the 
upper  house  were  at  first  appointed  in  Western 
Australia,  which  had  no  parliament  before 
1890.  In  the  four  states  of  the  Commonwealth 
where  the  upper  house  is  elective,  there  is  a 
property  qualification  for  voters,  and  in  some 
cases  for  members.  Workingmen  consider  this 
limited  franchise  a  grievance,  and  the  councils 
n  are  less  popular  with  the  people  than  the  cor- 


40  People  and  Institutions 

responding  house  of  American  legislatures. 
Property  influence  is  increased  in  these  bodies 
by  the  fact  that  in  New  South  Wales,  Queens- 
land, and  Victoria  members  are  not  paid  for 
their  services. 

The  property  qualification  for  electors  to  the 
lower  house  has  recently  been  abolished,  ex- 
cept in  Queensland  and  Western  Australia. 
Women  have  the  franchise  in  federal  elections, 
and  in  New  Zealand,  New  South  Wales,  South 
Australia,  Western  Australia,  and  Tasmania. 
The  payment  of  members  of  the  lower  house  has 
been  established,  in  most  instances  upon  the  in- 
itiative or  with  the  support  of  the  labour  party. 
Plural  voting  originally  existed  in  all  the  states. 
New  Zealand  was  the  pioneer  in  adopting  man- 
hood suffrage  and  the  "one  man,  one  vote,"  the 
first  elections  under  these  provisions  taking 
place  in  1890.  It  was  followed  by  New  South 
Wales  in  1894,  and  Victoria  in  1899.  Prior  to 
these  reforms,  which  are  due  to  the  democratic 
movement  which  has  found  expression  in  the 
labour  party,  a  person  was  entitled  to  vote  in 
all  the  election  districts  in  which  he  held  prop- 


People  and  Institutions  41 

erty  enough  to  qualify  him  as  an  elector.  The 
plural  vote  still  exists  in  municipal  elections. 

Members  of  parliament  are  not  required  to  re- 
side in  the  districts  they  represent.  This  works 
to  the  advantage  of  labour  politicians,  who 
usually  receive  their  political  training  in  met- 
ropolitan trades  hall  councils.  The  metropolis 
of  each  state  is  the  capital  and  the  seat  of  po- 
litical organisation.  The  predominance  of  city 
men  in  party  councils  gives  them  an  advantage 
in  soliciting  nominations.  Therefore  real  farm- 
ers are  strikingly  absent  from  legislative  assem- 
blies. Representatives  are  the  attorneys  of 
their  district,  not  part  of  the  people  they  serve. 
The  city  rules  the  country,  not  the  country  the 
city.  Legislation,  taxation,  and  public  works 
show  the  impress  of  this  condition. 

The  separation  of  Church  and  State  came 
slowly  in  the  colonies,  and  State  aid  was  long 
granted  to  educational  institutions  under  ec- 
clesiastical control.  Public  schools  are  dis- 
paraged in  comparison  with  private  schools. 
Government  lands  have  not  been  used  to  endow 
State  education.  Partly  for  this  reason  the 


42  People  and  Institutions 

scope  and  liberality  of  the  school  system  are 
more  limited  than  in  the  United  States.  New 
Zealand  and  most  of  the  states  provide  primary 
instruction  without  cost  to  the  parents,  but  in 
New  South  Wales  and  Tasmania  fees  are  still 
charged.  Secondary  and  higher  institutions 
are  aided  by  the  government,  but  tu- 
ition is  not  free.  Fees  are  also  required  in 
the  technical  schools.  Nothing  corresponding 
to  our  state  universities  exists  in  Australasia. 
An  aristocratic  sentiment  and  class  distinctions 
more  English  than  American  still  persist  in  the 
universities  of  Melbourne  and  Sydney.  A  stu- 
dent could  not  pay  his  way  through  those  in- 
stitutions by  his  own  labour  without  losing  social 
caste.  This  is  not  true  of  the  technical  schools, 
where  a  thoroughly  democratic  atmosphere  pre- 
vails. There  is  less  faith  in  popular  education 
for  all  the  people  beyond  a  certain  standard 
than  in  the  United  States.  Australian  senti- 
ment in  this  respect  is  about  where  American 
opinion  stood  fifty  years  ago.  In  both  the 
Commonwealth  and  New  Zealand  a  boy  is  edu- 
cated for  his  class,  as  if  in  accordance  with  a 


People  and  Institutions  43 

dogma  of  social  and  industrial  predestination. 
Primary  and  technical  instruction  are  strictly 
utilitarian.  Australasian  educators  strive  to 
give  each  pupil  the  kind  and  amount  of  edu- 
cation that  will  fit  him  to  follow  the  footsteps 
of  his  father.  This  does  not  satisfy  the  demo- 
cratic ideal,  that  every  youth  has  a  right  to  an 
equal  opportunity  to  fit  himself  for  any  career, 
regardless  of  his  present  rank  or  probable  fu- 
ture status  in  society. 

State  activity  has  been  extended  into  ex1 
perimental  spheres  partly  because  Australasia 
has  a  highly  efficient  instrument  for  these  en- 
terprises in  its  centralised  administration  and 
elaborate  civil  service.  In  a  body  politic  an 
organ  sometimes  creates  a  function.  Thou- 
sands of  State  employees,  seeking  their  common 
welfare  through  political  means,  make  employ- 
ment for  themselves,  and  have  a  class  interest  in 
governmentalism.  A  centralised  government 
involves  a  salaried  administration.  In  America 
the  township  precedes  the  state  historically  in 
many  sections,  and  has  a  common-law  claim  to 
residuary  political  authority.  Local  officers 


44  People  and  Institutions 

are  mostly  unsalaried,  or  are  not  paid  enough 
to  make  public  service  a  profession.  They  fol- 
low their  regular  vocations  and  attend  to  offi- 
cial duties  at  spare  moments.  They  are  elected 
for  fixed  terms,  expect  soon  to  return  to  private 
life,  and  so  do  not  sever  their  former  business 
relations.  In  Australasia,  on  the  other  hand, 
local  government  is  historically  a  concession 
from  the  colonial  parliament.  The  powers  of 
local  units  are  hedged  round  with  statutory 
limitations.  Towns  and  districts  do  not  di- 
rectly support  or  administer  the  public  schools 
or  the  principal  highways.  Their  financial 
matters  are  closely  supervised  by  the  state.  The 
functions  performed  by  unsalaried  officials  are 
few  compared  with  those  in  charge  of  perma- 
nent civil  employees.  Serving  the  people  in 
public  capacities  is  more  of  a  life  profession 
than  in  the  United  States.  To  an  American 
the  local  political  units  of  Australia  and  New 
Zealand  do  not  seem  governing  bodies  at  all, 
but  rather  administrative  divisions  of  the 
State. 

This  is  not  due  entirely  to  historical  causes. 


People  and  Institutions  45 

It  is  partly  occasioned  by  the  sparse  popula- 
tion and  pastoral  pursuits  of  Australasia.  In 
the  states  where  farming  communities  are  most 
extensive,  local  government  is  most  vigorous. 
There  is  now  a  positive  movement  toward  en- 
larging the  powers  and  responsibilities  of  the 
smaller  political  divisions. 

Australian  civil  servants  have  been  charged 
with  abusing  their  political  influence.  They 
are  said  to  have  held  the  balance  of  voting 
power  in  twenty-three  parliamentary  districts 
in  Victoria,  and  to  have  used  this  power  to  in- 
crease the  State's  payroll  several  hundred  thou- 
sand pounds.  The  evil  was  real  enough  to  jus- 
tify in  the  minds  of  the  people  a  constitutional 
amendment,  giving  government  employees  sepa- 
rate representation  in  parliament.  Civil  and 
railway  servants  elect  one  member  to  the  upper 
house  and  three  members  to  the  lower  house,  but 
have  no  franchise  in  regular  election  districts. 
With  the  extension  of  State  employment  the 
conflict  of  interests  between  the  tax-payer  and 
the  tax-receiver  increases,  and  the  political 
rights  of  the  multitude  of  public  servants  must 


46  People  and  Institutions 

be  curtailed,  lest  they  become  masters  of  the 
people. 

The  difference  in  the  history  of  social  move- 
ments in  the  United  States  and  Australasia  is 
partly  due  to  the  fact  that  industrial  and  po- 
litical problems  that  presented  themselves  in 
succession  in  the  United  States  have  come  up 
for  solution  simultaneously  in  the  colonies.  In 
America,  during  the  first  half  of  the  last  cen- 
tury, a  party  composed  of  working  people  agi- 
tated for  equal  suffrage  and  other  political  re- 
forms for  which  the  same  classes  in  Australasia 
are  now  striving.  The  fight  for  the  public 
schools  in  the  United  States  was  a  democratic 
movement  that  might  have  been  fused  with  the 
labour  movement  had  it  been  delayed.  The 
"Know-Nothing"  party,  with  its  jealousy  of 
alien  labour  competition,  marked  a  stage  of  na- 
tional sentiment  from  which  Australia  has  not 
yet  evolved.  Because  we  realised  so  many  phases 
of  social  and  political  equality  before  the  great 
labour  questions  of  the  present  became  promi- 
nent, the  latter  are  with  us  a  distinct  and 
purely  industrial  issue,  and  therefore  less  di- 


People  and  Institutions  47 

rectly  the  concern  of  the  government.  If  the 
working  people  of  the  United  States  were  fight- 
ing for  equal  suffrage,  free  schools,  immigra- 
tion restriction,  and  liberal  land  laws,  at  the 
same  time  as  for  higher  wages,  shorter  hours, 
and  generally  better  conditions  of  employment, 
trade  union  methods  would  appear  to  them  as 
inadequate  as  they  do  to  colonial  workingmen. 


CHAPTER  III 
WORKINGMEN  AND  TRADE  UNIONS 

THE  people  of  the  colonies  regard  the  Ameri- 
can Republic  as  an  industrial  and  manufactur- 
ing nation,  and  themselves  as  engaged  chiefly  in 
primary  production.  But  from  the  standpoint 
of  labour  conditions  this  is  not  true.  Nearly 
twenty-seven  per  cent,  of  the  bread-winners  of 
Australasia  follow  manufacturing  and  mechani- 
cal pursuits,  as  compared  with  but  twenty-four 
per  cent,  in  the  United  States.  Among  pri- 
mary producers,  the  proportion  of  farmers, 
more  than  half  of  whom  are  their  own  employ- 
ers, is  twice  as  great  in  America  as  in  Australia 
and  New  Zealand.  Therefore  employing  in- 
dustries are  more  prominent,  and  wage-earners 
have  relatively  more  political  strength  in  the 
Australasian  colonies  than  in  the  American 
Union.  The  ratio  of  urban  to  rural  popula- 
tion is  also  higher  in  Australasia,  where  forty- 
48 


Workingmen  and  Trade  Unions    49 

seven  per  cent,  of  the  people  reside  in  cities  of 
not  less  than  four  thousand  inhabitants,  as 
compared  with  thirty-seven  per  cent,  in  the 
United  States.  The  average  concentration  of 
working  population  is  therefore  greater  in  those 
countries,  and  the  labour  element  has  better  op- 
portunities for  organisation. 

Four  main  groups  of  occupations  employ  the 
service  of  most  of  the  workers  engaged  in  the 
labour  movement.  The  incju^trial-gorkmen  in 
the  citjesL-B^eJ^-^ft^liest  -organisGd  and  have  led 
in  political  agitation.  Closely  allied  with  these 
and  forming  part  of  the  urban  labour  centre  are 
the  men  employed  in  transportation,  especially 
seamen  and  waterside  workers.  The  railway 
associations  also  have  their  headquarters  in  the 
metropolis.  The  two  large  non-urban  bodies  of 
workers  are  the  miners  and  the  shearers.  The 
former  are  collected  in  mining  camps,  under 
conditions  favourable  for  organisation.  The 
shearers  and  station  hands  are  an  exception  to 
the  rule  that  trade  unions  are  usually  most 
powerful  where  workingmen  are  skilled  and  as- 
sociated in  large  bodies  by  the  nature  of  their 


50    Workingmen  and  Trade  Unions 

employment.  These  men  are  intermittent  and 
nomadic  workers,  employed  under  conditions 
somewhat  similar  to  those  prevailing  among 
lumbermen  in  the  United  States  and  Canada. 
Their  occupation  is  seasonal  and  might  alter- 
nate with  some  other  form  of  employment. 
They  live  in  small  groups  during  the  shearing 
season,  but  are  isolated  from  other  society  and 
develop  class  peculiarities — as  do  lumbermen 
and  seamen.  Accustomed  to  comparatively 
short  periods  of  strenuous  labour  under  monoto- 
nous surroundings,  many  of  them  waste  the  sav- 
ings of  a  season  in  reckless  dissipation  when 
they  reach  a  settlement.  They  are  often 
obliged  to  live  from  hand  to  mouth,  as  a  conse- 
quence of  their  own  indiscretion  or  because 
other  employment  does  not  offer  during  the  dull 
season  on  the  ranches.  This  uneven  economic 
condition  breeds  social.- discontent.  -Xha-solir 
tary  life  fosters  strong  and  almost  fanaticfll.al- 
legiance  to  trade  union  ideals.  Thereforejthe 
shearers  and  employees  in  occupations  -associ- 
ated with  shearing,  form  one  of  the  most  influ- 
ential labour  organisations  in  Australia. 


Workingmen  and  Trade  Unions    51 

The  general  welfare  of  the  working  classes  in 
Australasia  does  not  differ  widely  from  that  in 
the  United  States.  The  hours  of  work  are 
fewer  in  most  occupations,  but  the  wage  per 
hour  is  less  than  in  America.  The  cost  of  liv- 
ing is  about  the  same  in  both  countries.  The 
difference  in  the  wage  of  skilled  and  unskilled 
workers  is  much  greater  in  our  own  country, 
where  the  common  labourer  is  usually  either  a 
negro  or  a  foreigner.  This  variation  of  wages 
in  the  United  States,  parallel  with  national  and 
race  lines,  lessens  solidarity  of  sentiment  and 
class  consciousness  among  workmen,  as  com- 
pared with  those  of  Australasia,  where  such 
conditions  do  not  exist.  Not  only  is  the  touch 
of  sympathy  closer  among  people  of  the  same 
nationality  and  similar  economic  status,  but 
their  rivalry  is  less  keen.  Where  the  difference 
between  the  wage  of  a  helper  and  a  journeyman 
is  fifty  cents  a  day,  as  in  Australia  and  New 
Zealand,  the  former  does  not  make  the  same  ef- 
fort to  drive  the  latter  out  of  his  position  that 
he  does  when  this  difference  is  two  or  three  dol- 
lars, as  in  America.  But  a  marked  gradation 


52    Workingmen  and  Trade  Unions 

of  wages  promotes  industrial  efficiency,  because 
skilled  workers  therefore  increase  their  skill,  at- 
tention, and  perseverance,  in  order  to  maintain 
their  wage  advantage  over  unskilled  workers, 
and  the  latter  for  the  same  reason  strive  more 
strenuously  to  reach  an  equal  status  with  the 
men  above  them.  The  opportunities  for  prog- 
ress within  a  craft  afford  to  some  extent  an  end 
of  attainment — an  object  towards  which  am- 
bition is  directed  inside  the  four  corners  of  the 
industry.  This  ambition  can  be  satisfied  only 
by  individual  effort,  by  each  workingman's  in- 
creasing his  personal  efficiency,  not  by  collective 
action.  But  where  all  those  engaged  in  an  oc- 
cupation receive  about  equal  pay,  the  desire  for 
improvement  embodies  itself  in  an  effort  to  raise 
the  wages  of  the  entire  group,  and  thus  starts 
a  class  agitation. 

The  level  rate  of  wages  in  Australasia  is  ex- 
plained by  two  chief  causes.  The  demand  for 
unskilled  workers,  in  proportion  to  artisans  and 
factory  operatives,  is  greater  in  undeveloped 
colonies,  like  Australia  and  New  Zealand,  than 
in  an  older  country  like  Great  Britain.  Eng- 


Workingmen  and  Trade  Unions    53 

land  is  in  so  marked  a  degree  a  manufacturing 
country,  that  the  British  immigration  to  Aus- 
tralasia probably  contained  a  larger  proportion 
of  skilled  workers  than  a  new  country  required. 
On  the  other  hand,  the  immigrants  to  the  Unit- 
ed States  have  been  very  largely  land-seekers 
from  the  unskilled  rural  population  of  Europe. 
In  the  one  case  the  new  arrivals  tended  to  lower 
the  relative  wages  of  skilled,  and  in  the  other 
of  unskilled  workers,  by  contributing  in  each 
instance  to  the  better  supplied  section  of  the 
labour  market.  Another  potent  influence  in 
raising  the  wages  of  untrained  workmen  in  Aus- 
tralasia has  been  the  high  profit  of  primary  pro- 
duct ion,  due  to  natural  resources  large  in  pro- 
portion to  population.  Other  things  being 
equal,  the  most  productive  industry  usually  pays 
the  highest  wages.  The  per  capita  value  of  pri- 
mary products  placed  upon  the  market  annu- 
ally is  fifty  per  cent,  greater  in  Australasia 
than  in  the  United  States.  This  justifies  the 
expectation  that  the  wages  of  common  labour- 
ers, by  whose  work  primary  production  is 
largely  carried  on,  would  be  high  in  the  Com- 


54    Workingmen  and  Trade  Unions 

monwealth  and  New  Zealand.  Turning  to 
manufactures,  the  reverse  is  true.  The  per 
capita  product  of  workers  employed  in  this 
group  of  occupations  is  nearly  three  times  as 
valuable  in  the  United  States  as  in  Australasia. 
In  the  latter  country  the  primary  producer 
creates  about  $760  worth  of  wealth  per  annum, 
and  the  manufacturing  operative  turns  out 
$763  worth  of  manufactured  commodities,  while 
in  the  United  States  the  primary  producer 
returns  about  $500  worth  of  raw  mate- 
rials, and  the  manufacturing  operative  turns 
out  about  $2,278  worth  of  manufactured 
goods. 

However,  the  absolute  wages  of  unskilled 
workers  are  not  much  lower  in  the  United 
States  than  in  Australasia.  The  highest  pay 
of  common  labourers  anywhere  in  the  colonies 
is  $2.50  a  day,  which  is  the  prevailing  rate  in 
the  Western  Australian  gold  fields,  where  the 
cost  of  living  is  excessive.  In  Sydney  and  some 
other  urban  districts  union  labourers  try  to 
maintain  a  rate  of  two  dollars  a  day,  but  are 
only  partially  successful.  The  average  weekly 


Workingmen  and  Trade  Unions    55 

earnings  of  over  2,300  labourers  in  that  city 
were  $9.25.  In  many  parts  of  the  Common- 
wealth and  in  some  places  in  New  Zealand  the 
usual  wage  ranges  from  $1.25  to  $1.50  a  day. 
This  is  in  nearly  all  cases  for  eight  hours'  work. 
The  pay  of  farm  labourers  is  about  the  same 
in  America  and  Australasia,  for  working  days 
of  equal  length.  Unskilled  labourers  have  been 
well  paid  in  America  because  they  have  had 
ready  access  to  public  lands  or  easily  acquired 
farming  property.  In  the  colonies  wages  have 
been  kept  down  by  the  land  monopoly  in  spite 
of  the  larger  product  of  the  labourer.  The 
rapid  development  of  natural  resources  attend- 
ing our  large  immigration,  and  the  construc- 
tion of  railways  and  other  means  of  communi- 
cation required  by  this  development,  have  also 
caused  an  exceptional  demand  for  labourers  in 
America. 

The  eight-hour  day,  while  an  ancient  labour 
ideal,  has  been  established  in  Australasia  partly 
because  of  the  climate.  The  conditions  that 
temper  the  physical  activity  of  white  men  in 
our  Gulf  States  obtain  in  the  greater  part  of 


56    Workingmen  and  Trade  Unions 

Australia  and  much  of  New  Zealand.  Frost 
seldom  comes  to  tone  up  the  relaxed  energies  of 
the  manual  labourer,  and  snow  and  ice  never 
compel  a  rest  from  outdoor  industries.  Wheis 
nature  works  long  hours,  men  require  short 
hours.  The  propaganda  for  the  eight-hour 
day  antedates  the  present  labour  movement,  and 
is  a  condition  out  of  which  it  has  arisen.  Short 
working  hours  gave  wage-earners  leisure  for 
organisation  and  political  agitation. 

Although  the  winters  do  not  interrupt  labour 
in  Australia,  the  not  infrequent  droughts  are 
a  climatic  influence  more  important  in  lessen- 
ing employment  than  a  protracted  reign  of  ice 
and  snow.  They  create  a  general  depression  in 
both  rural  and  city  industries.  More  than  any 
other  single  cause,  they  account  for  the  period- 
ical climaxes  of  distress  among  workmen,  which 
have  at  times  loomed  large  in  the  public  horizon 
of  Australasia,  and  have  led  to  large  loan  ex- 
penditures for  public  works  and  other  measures 
of  government  relief. 

These  periods  of  forced  idleness  favour  the 
spread  of  new  social  theories.  Business  depres- 


Workingmen  and  Trade  Unions    57 

sions  in  America  have  usually  promoted  the 
growth  of  socialist  sentiment.  It  is  the  con- 
trast between  prosperity  and  want,  rather  than 
the  permanence  of  either  condition,  that  cre- 
ates discontent.  However  stultifying  habitual 
idleness  may  be,  occasional  and  involuntary 
idleness  makes  men  think — if  not  wisely,  at  least 
intensely.  The  large  city  population,  and  the 
crippling  of  rural  industries  which  drives  coun- 
try labourers  to  the  city  in  times  of  drought,  en- 
courage the  diffusion  of  novel  social  doctrines. 
The  open-air  speakers  who  take  possession  of 
the  public  domain  at  Sydney,  and  the  corre- 
sponding parkway  on  the  Yarra  Bank  at  Mel- 
bourne— shaded  preserves  that,  in  the  genial 
Australian  climate,  invite  idle  workmen — reach 
a  possible  fourth  of  the  population  of  the  Com- 
monwealth. These  speakers  are  not  officially 
recognised  by  labour  politicians  as  coadjutors, 
but  they  help  effectively  to  weave  the  loose 
strands  of  discontent  into  a  fabric  of  radical 
social  theories. 

The  first  trade  unions  in  Australasia  were 
branches  of  the  English  societies^. formed  about 


58    Workingmen  and  Trade  Unions 

1850  in  Sydney  —  at  the  time  the  only  city  in 
Australia  important  enough  to  support  labour 
organisations.  Soon  afterwards  the  gold  dis- 
coveries caused  a  large  immigration  to  Victoria, 
and  unions  were  formed  at  Melbourne,  which 
soon  rivalled  the  older  metropolis  in  wealth  and 
population.  No  unions  were  formed  in  the 
other  colonies  until  after  1874,  those  in  New 
Zealand  and  Western  Australia  being  of  even 
more  recent  origin. 

Agitation  for  an  eight-hour  day,  and  opposi- 
tion  to  Chinese  immigration,  were  the  first  is_- 
sues  to  bring  workers  together  in  associations. 
The  latter  question  had.an  i 


because  measures  to  restrict  immigration  in  one 
colony  were  ineffective  without  the  co-operation 
of  neighbouring  colonies.  The  effect  was  to 
create  a^sense  of  common  interests  among  the 
workmen  throughout  Australia.  The  organ  i- 
sations  of  coastal  seamen  helped  to  maintain 
this  sentiment  of  solidarity.  As  early  as  1879, 
an  iotercolQaifiLirade  union  congress,  modelled 
upon  a  similar  conference  of  labour  organisa- 
tions in  Great  Britain,  was  held  at  Sydney*  At 


Workingmen  and  Trade  Unions    59 

this  and  the  following  congress,  which  met  at 
Melbourne  in  1884,  constitutional  reforms,  such 
as  "one  man,  one  votes"  (ind  payment  of  mem- 
bers of  parliament,  were  agitated.  No  measures 
looking  to  a  revolution  in  industrial  organisa- 
tion were  proposed,  and  the  strictly  labour  de- 
mands were  mainly  inspired  by  the  trend  of 
trade  union  demands  in  Great  Britain.  But 
the  need  of  supporting  a  programme  of  consti- 
tutional reform  by  political  effort  did  not  es- 
cape the  delegates.  The  second  congress  unan- 
imously adopted  a  resolution  urging  the  unions 
in  different  colonies  to  appoint  parliamentary 
committees,  to  lobby  in  the  interest  of  labour, 
and — "where  possible  to  endeavour  to  obtain 
for  labour  direct  representation  in  parliament." 
The  debate  upon  the  motion  brought  out  the 
fact  that  direct  representation  was  under- 
stood to  mean  that  "artisans  should  send 
artisans  to  parliament,  and  miners  should  send 
miners." 

In  1885  the  number  of  organised  workmen 
in  Australia  was  estimated  to  be  150,000,  in  a 
population  of  3,000,000,  a  proportion  probably 


60    Workingmen  and  Trade  Unions 

fifty  per  cent,  larger  than  the  present  ratio  in 
the  United  States.  At  the  fifth  trade  unioyi 
congress,  held  at  Brisbane  in  1888,  every  colony 
except  Western  Australia  was  represented.  The 
proceedings  reveal  more  or  less  socialist  senti- 
ment among  the  delegates.  This  congress  was 
the  first  to  adopt  an  electoral  programme,  the 
predecessor  of  the  present  party  platform. 
Unionists  were  to  vote  only  for  parliamentary 
candidates  pledged  to  carry  out  these  demands,. 
The  trade  unionists  of  South  Australia  had  se- 
cured the  return  of  seven  out  of  nine  candidates 
supported  at  a  previous  election.  Although 
these  candidates  were  not  workingmen,  and  so 
not  direct  representatives  of  labour  in  the  sense 
advocated  by  the  earlier  congress,  this  success 
gave  impetus  to  the  policy  of  political  organ- 
isation. 

The  following  three  years  were  very  event- 
ful in  the  history  of  public  opinion  in  Austra- 
lasia. The  first  incident  that  reacted  strongly 
on  popular  sentiment  was  the  great  dock  strike 
in  London.  That  event  evoked  sympathy  with 
working  people  and  a  certain  social  altruism 


Workingmen  and  Trade  Unions    61 

among  all  classes  in  the  colonies.  As  in  Amer- 
ica at  about  the  same  time,  there  seems  to  have 
been  a  contagious  and  emotional  socialism  of 
the  "Looking  Backward"  variety  abroad. 
Henry  George  had  been  in  the  colonies,  and  his 
views  were  receiving  much  attention.  Austra- 
lasia had  been  seeking  a  land  panacea  for  half 
a  century.  A  few  years  later  an  offshoot  of 
this  movement  manifested  itself  in  an  attempt 
to  realise  some  of  these  socialist  ideals  in  an 
Australian  communistic  settlement  in  Para- 
guay, which,  like  many  similar  enterprises  in 
America,  resulted  in  gradual  failure. 

The  turning  point  in  the  history  of  trade 
unionism  came  in  1890.  The  pivotal  incident 
was  a  strike  among  the  seamen  in  Victoria, 
which  soon  extended  to  other  trades  throughout 

Australia    and    New    Zealand.     The original 

point  at  issue  did  not  relate  to  wages,  but  to  the 
right  of  a  ship  masters'  and  mates'  association 
to  join  the  Melbourne  Trades  Hall.  The  real 
object  of  both  parties,  however,  was  to  settle 
the  relative  authority  of  employers  and  unions 
in  all  lines  of  business.  As  the  strike  extended 


62    Workingmen  and  Trade  Unions 

from  trade  to  trade,  industry  of  every  descrip- 
tion was  paralysed.  Public  sympathy  was  di- 
vided. The  chief  justice  of  Victoria  subscribed 
$250  weekly  to  the  strike  fund  of  the  unions. 
When  the  trouble  spread  to  New  Zealand  the 
present  chief  justice  and  former  premier  took 
the  platform  in  favour  of  the  strikers.  But, 
upon  the  whole,  people  sided  with  employers. 
This  was  especially  true  in  New  Zealand,  where 
the  public  resented  having  the  industries  of  the 
colony  tied  up  by  a  dispute  originating  twelve 
hundred  miles  across  the  ocean.  The  workers 
were  completely  defeated,  and  the  seamen  have 
not  even  to-day  recovered  the  rate  of  wages  pre- 
vailing  before  this  contest.  Trade  unionism 
was  for  a  time  prostrate,  especially  in  the 
larger  cities. 

The  miners'  and  shearers'  organisations  were 
less  affected,  and  the  latter  conducted  strikes 
of  their  own  in  Australia  during  1891  and 
1894.  These  difficulties  were  accompanied  by 
disorder,  especially  in  the  back  country  of 
Queensland.  Houses  were  burned  and  men  were 
shot.  The  shearers  formed  camps  in  remote 


Workingmen  and  Trade  Unions    63 

districts,  and  maintained  the  semblance  of  a 
military  organisation.  In  some  colonies  the 
government  was  sufficiently  alarmed  to  call  out 
soldiers,  and  many  of  the  strikers  were  impris- 
oned. Men  who  served  terms  in  confinement  for 
participation  in  these  strikes  have  since  risen 
to  be  cabinet  ministers  in  Australia.  The  se- 
vere measures  taken  by  the  authorities  against 
the  strikers  were  bitterly  resented  by  the  work- 
ingmen,  and  made  them  more  anxious  to  acquire 
power  in  the  government. 

The  substitution  of  political  methods  for 
older  forms  of  propaganda  that  followed  has 
not  superseded  trade  unions,  though  it  has  made 
them  subsidiary  to  party  organisation.  For  a 
short  period  after  the  maritime  strike  there  was 
a  tendency  unduly  to  decry  industrial  weapons 
and  exalt  political,  but  experience  soon  sobered 
those  labour  optimists  who  saw  in  organised 
battalions  of  workingmen  voters  an  instrument 
for  subjugating  capital.  Nor  did  strikes  cease 
with  the  defeats  sustained  by  the  unions  in  the 
early  nineties.  A  few  years  later  there  was  a 
mining  strike  in  New  South  Wales  that  cost  the 


64    Workingmen  and  Trade  Unions 

colony  half  a  million  dollars,  of  which  $62,363 
was  spent  for  police.  The  most  important  in- 
dustrial disturbance  of  recent  years  was  in 
1904,  when  the  government  railway  employees 
of  Victoria  struck,  and  after  tying  up  the 
transportation  of  the  state  for  a  short  period 
were  defeated. 

At  present  trade  unions  are  becoming  modi- 
fied into  industrial  unions,  which  are  litigious 
rather  than  militant  organisations,  the  crea- 
tures and  instruments  of  state  regulation.  In 
the  old  unions  the  principle  of  self-dependence 
was  emphasised ;  in  the  new  unions  state-depend- 
ence is  made  prominent.  The  conservative 
traditions  of  the  transplanted  English  organi- 
sations still  survive  in  such  societies  as  the  Amal- 
gamated Engineers,  the  Amalgamated  Carpen- 
ters and  Joiners,  the  Stonemasons,  and  some  of 
the  metal  workers'  associations.  These  unions 
retain  their  benefit  features  and  possess  accu- 
mulated funds.  They  seldom  engage  in  strikes, 
and  disparage  political  activity.  They  adopt 
a  critical  attitude  towards  laws  passed  and  leg- 
islation proposed  by  the  labour  party,  and  look 


Workingmen  and  Trade  Unions    65 

upon  the  modern  tendencies  of  the  labour  move- 
ment with  the  stern  eye  of  an  older  faith.  But 
the  members  are  not  numerous  and  they  mostly 
assume  the  passive  attitude  of  the  supporters  of 
declining  doctrines.  Their  influence  is  little 
felt  in  the  councils  of  labour. 

Recent  laws  have  somewhat  strengthened 
trade  distinctions  among  workers,  because  state 
regulation  deals  only  with  organisations  in  spe- 
cific trades  and  industries.  On  the  other  hand, 
the  exigencies  of  political  propaganda  tend  to 
relax  trade  lines  and  favour  composite  unions. 
For  when  a  workingmen's  society  becomes  in  one 
of  its  most  important  relations  an  organisation 
of  voters,  it  naturally  places  a  premium  upon 
numerical  strength.  This  makes  it  to  the  inter- 
est of  leaders  to  embrace  as  many  occupations 
and  classes  of  workers  as  possible  within  the  as- 
sociation. The  Australian  Workers'  Union, 
which  is  the  great  shearers'  society  of  the  east- 
ern states,  not  only  enrols  all  classes  of  ranch 
employees,  but  even  country  storekeepers  and 
small  farmers. 

One   effect   of   industrial   unionism   as    con- 


66    Workingmen  and  Trade  Unions 

.  trasted  with  trade  unionism,  is  to  lessen  the  im- 
portance of  craft  skill  as  a  qualification  for 
membership,  and  to  emphasise  correspondingly 
the  comparatively  chance  relationship  of  em- 
ployee. The  State  thereupon  assumes  the 
function  of  guaranteeing  the  competency  of 
workmen,  by  regulating  apprenticeship  and 
fixing  a  graduated  minimum  wage  for  different 
degrees  of  skill  and  experience.  A  second 
effect,  most  important  in  shaping  union  policy, 
is  the  greater  influence  thus  given  unskilled 
workers  in  labour  councils.  So  long  as  common 
labourers  organise  separately,  they  count  only 
by  association  units.  If  in  a  city  there  are  nine 
unions  of  skilled  workers  of  a  hundred  members 
each  and  one  labourers'  union  of  a  thousand 
men,  the  unskilled  workers  are  outnumbered  nine 
to  one  in  the  practical  determination  of  labour 
policy.  This  is  what  class-conscious  propa- 
gandists mean  when  they  refer  to  an  aristocracy 
of  labour.  But  when  skilled  and  unskilled 
workers  are  associated  in  the  same  societies,  the 
numerical  superiority  of  the  latter  makes  itself 
felt.  Control  passes  from  the  skilled  minority 


Workingmen  and  Trade  Unions    67 

to  the  unskilled  majority,  and  a  democracy  of 
labour  is  established. 

So  long  as  highly  trained  workmen  are  sepa- 
rated from  their  less  skilled  fellow-employees 
by  trade  union  barriers,  their  societies  aim  to 
secure  special  benefits  as  compensation  for  this 
training,  and  to  limit  competition  by  curtailing 
the  supply  of  workmen ;  therefore  they  are  con- 
scious of  interests  diverse  from  those  of  lower 
grades  of  workers.  Such  an  organisation  of 
labour  favours  a  marked  difference  in  the  wages 
of  skilled  and  unskilled  employees.  Industrial 
unionism  takes  away  the  instrument  by  which 
highly  paid  workmen  maintain  their  superior 
status,  by  fusing  their  interests  with  those  of 
their  fellow-employees,  and  tends  to  establish  a 
comparative  equality  of  wages  throughout  the 
v  i,  entire  membership  of  the  organisation.  Con- 
versely, the  level  wage  rate  naturally  prevailing 
in  Australasia  probably  favours  the  growth  of 
industrial  unions.  This  condition  approaches 
the  socialist  ideal.  Needs  rather  than  services 
become  the  measure  of  compensation.  The 
democratic  spirit  raises  its  demand  from  po- 


68    Workingmen  and  Trade  Unions 

litical  equality  to  economic  equality.  The  first 
is  made  a  stepping  stone  to  the  second.  Indus- 
trial unionism,  or  the  organisation  of  workers 
along  lines  of  common  employment,  recognises 
a  principle  more  collective  than  trade  unionism, 
which  rests  upon  a  basis  of  individual  skill. 
Co-operative  service  rather  than  individual  abil- 
ity is  its  principle  of  classification.  Trade 
unionism  protects  the  class  through  the 
craft;  industrial  unionism  protects  the  craft 
through  the  class. 

It  is  interesting  to  note  how  many  causes  may 
co-operate  to  deflect  a  social  movement  into  a 
new  channel.  Unskilled  labourers,  who  form 
the  mass  of  workers  in  every  country,  are  the 
last  to  be  organised.  They  became  an  influen- 
tial force  in  Australasia  about  the  time  of 
the  shearers'  strikes  recently  mentioned.  At 
the  same  time  agitation  for  an  extension  of  the 
franchise  placed  the  political  weapon  in  the 
hands  of  the  new  unions  just  as  they  were  able 
to  use  it.  Methods  for  preventing  strikes  de- 
vised by  lawyers  and  men  out  of  touch  with 
practical  labour  matters  called  logically  for 


Workingmen  and  Trade  Unions    69 

modification  in  workers'  societies  that  favoured 
opening  them  to  many  not  previously  admitted. 
The  political  labour  party,  whose  primary 
units  are  the  trade  societies,  gave  representa- 
tion to  these  associations  in  its  councils  propor- 
tionate to  their  voting  strength.  Finally,  the 
Taff  Vale  decision,  which  was  immediately 
adopted  as  a  precedent  by  the  courts  of  Austra- 
lasia, struck  directly  at  the  financial  resources 
of  the  unions,  without  giving  them  compensat- 
ing protection,  and  by  thus  depriving  them  of 
their  most  important  strike  weapon  forced  them 
to  adopt  political  methods.  All  of  these  causes 
co-operated  within  a  decade  to  strengthen  the 
disposition  of  workingmen  to  employ  as  instru- 
ments for  remedying  industrial  grievances  or- 
ganisations working  in  alliance  with  the  State 
or  a  political  party.  At  the  beginning  of  this 
period  their  unions  were  hardly  more  radical 
than  the  British  organisations  from  which  they 
sprang.  At  its  close  they  were  committed  to  a 
programme  even  now  far  from  being  generally 
accepted  by  the  workmen  of  the  mother  country. 
This  period  dates  from  the  organisation  of  a 


jo    Workingmen  and  Trade  Unions 

labour  party  in  Australia,  and  of  a  liberal- 
labour  party  in  New  Zealand,  in  1891,  to  the 
adoption  of  compulsory  arbitration  in  two 
states  of  the  Commonwealth,  after  four  years' 
trial  in  the  sister  colony,  ten  years  later. 


CHAPTER  IV 
THE  POLITICAL  LABOUR  MOVEMENT 

THE  failure  of  the  maritime  strike,  in  1890, 
made  the  workingmen  of  Australasia  distrust 
trade  union  methods.  The  disorders  and  busi- 
ness embarrassments  which  this  disturbance  oc- 
casioned strongly  affected  public  opinion  in  the 
whole  community.  The  period  of  depression 
that  followed,  culminating  in  the  crisis  of 
1893,  was  accompanied  by  a  wave  of  so- 
cial discontent.  The  leaders  of  the  dis- 
credited labour  organisations  saw  the  need  of 
adopting  new  tactics.  Friendly  and  unfriendly 
advisers  from  all  classes  of  society  pointed  out 
the  evils  of  industrial  conflicts,  and  sang  the 
praises  of  legal  remedies  for  labour  grievances. 
The  workingmen  were  told  to  go  into  politics 
and  use  their  ballots  to  right  their  wrongs. 
They  took  the  advice,  and  the  political  labour 
party  was  the  result. 

71 


72    The  Political  Labour  Movement 

In  Australia  the  influence  of  the  intercolonial 
congresses  and  federal  unions  gave  at  the  out- 
set a  national  character  to  this  political  move- 
ment, but  the  genesis  of  the  party  and  its  pro- 
gramme and  methods  in  different  colonies  were 
not  identical.  The  New  Zealand  workingmen 
never  formed  a  class  party,  like  their  Austra- 
lian confreres,  but  merged  themselves  in  the  old 
liberal  party,  recasting  its  platform  and  organ- 
isation, a  fact  to  which  their  more  immediate 
practical  successes  are  largely  due.  A  distinct 
labour  party  was  formed  in  every  instance  in 
Australia,  however,  whose  parliamentary  rep- 
resentatives have  been  in  most  cases  working- 
men.  A  person  describing  industrial  legisla- 
tion would  naturally  turn  to  New  Zealand  as 
the  pioneer  in  the  political  movement ;  but  a  per- 
son whose  attention  is  first  engaged  by  methods 
and  ideals,  rather  than  by  attainments,  will  find 
in  the  history  of  the  Australian  labour  party 
the  clearest  exposition  of  the  tactics  and  the 
ultimate  programme  of  organised  workers  in 
the  colonies. 

Tin-  origin  of  the  party  dates  from  tin-  par 


The  Political  Labour  Movement    73 

liamentary  campaign  of  1891.  New  South 
Wales  elected  the  largest  labour  delegation  and 
afforded  the  most  interesting  political  develop- 
ments, although  South  Australia  shares  in  a 
modest  way  the  honour  of  launching  labour 
into  a  public  career.  The  mother  colony  sent 
thirty -five  labour  members  to  the  lower  house 
of  parliament  at  this  election,  besides  helping 
to  secure  the  return  of  ten  or  twelve  candidates 
who  were  pledged  to  labour  measures,  though 
not  official  representatives  of  the  party.  The 
organisation  which  had  conducted  so  success- 
ful a  campaign  was  called  the  Labour  Electoral 
League,  and  its  purpose  was  stated  to  be — "To 
bring  all  electors  who  are  in  favour  of  demo- 
cratic and  progressive  legislation  under  one 
banner."  The  first  of  the  sixteen  planks  of  its 
platform  called  for  the  abolition  of  plural  vot- 
ing, while  of  the  other  fifteen  planks  six  related 
to  such  general  measures  as  free  and  compul- 
sory education,  the  election  of  magistrates,  a 
system  of  local  government  and  decentralisa- 
tion of  government  functions,  the  federation  of 
the  colonies  upon  a  national  basis,  the  full  tax- 


74    The  Political  Labour  Movement 

ation  of  unimproved  land  values,  and  the  estab- 
lishment of  a  national  bank  and  a  national  irri- 
gation system.  Any  voter  was  eligible  to  join 
the  league  by  paying  a  subscription  amounting 
to  about  a  dollar  a  year.  As  measures  of  party 
discipline,  candidates  were  required  to  give  a 
pledge  to  resign  upon  demand  of  two-thirds  of 
their  constituents,  and  if  elected  to  sit  upon  the 
cross  benches.  There  was  no  provision  that 
labour  candidates  should  be  wage-earners. 

The  success  of  the  new  party  depended  upon 
its  avoiding  entangling  alliances  with  the  old 
parties,  and  subordinating  the  issues  of  former 
campaigns  to  matters  of  labour  policy.  Dur- 
ing a  transition  period,  while  the  party  was 
finding  itself,  the  latter  object  was  difficult  to 
attain.  Labour  candidates  were  elected  upon 
a  formal  platform,  it  is  true,  but  this  did  not 
prevent  their  giving  pledges  to  their  constitu- 
ents to  support  measures  not  included  in  the 
platform,  but  prominent  in  old  party  divisions. 
Free  trade  and  protection  had  hitherto  been  the 
leading  political  issue;  and  until  workmen  were 
taught  to  regard  other  questions  as  of  so  much 


The  Political  Labour  Movement    75 

greater  importance  to  themselves  as  to  sink  this 
into  comparative  obscurity,  it  could  not  be 
passed  over  in  an  electoral  campaign.  At  the 
first  caucus  of  the  labour  delegation  in  the  New 
South  Wales  parliament,  an  attempt  was  made 
to  have  the  members  sign  a  pledge  to  vote  on  all 
questions  as  a  majority  of  the  representatives 
should  determine.  A  number  of  members  re- 
fused to  be  bound  by  this  pledge,  and  as  a  re- 
sult the  party  split  on  the  tariff,  and  divided 
itself  as  evenly  as  possible  between  the  minis- 
terialists and  the  opposition,  seventeen  voting 
on  one  side  and  eighteen  on  the  other.  The  ne- 
cessity of  sinking  this  issue  had  been  foreseen, 
and  in  what  might  be  called  the  policy  speech  of 
the  spokesman  of  the  party  the  following  sen- 
tences occur:  "Poverty,  misery  of  every  kind, 
lack  of  employment,  and  sweating  exist  in  both 
free-trade  and  protection  countries.  If  that  be 
so,  how  can  it  make  any  difference  to  the  great 
mass  of  labour  which  fiscal  policy  is  uppermost  ? 
Neither  policy  means  a  greater  share  or  a 
fairer  share  of  the  wealth  locally  created  or  im- 
ported to  the  hands  who  work  for  the  country — 


76    The  Political  Labour  Movement 

or  a  greater  opportunity  of  access  to  the 
sources  of  wealth.  We  have  come  into  this 
house  to  make  and  unmake  social  conditions." 

The  division  in  the  party  greatly  weakened 
its  influence  during  this  session  of  parliament; 
but  a  new  electoral  law  was  obtained,  which 
abolished  plural  voting,  shortened  the  period  of 
legal  residence  for  voters,  lengthened  polling 
hours,  and  otherwise  favoured  the  franchise  of 
the  working  classes.  Therefore  the  first  re- 
forms obtained  by  the  labour  party  were  politi- 
cal rather  than  social. 

The  next  campaign  in  New  South  Wales  was 
significant  for  the  history  of  labour  politics  in 
the  entire  Commonwealth ;  and  when  at  some  fu- 
ture date  the  evolution  of  party  organisation 
in  Australia  is  critically  studied,  the  control- 
ling principle  of  important  changes  may  be 
found  in  the  tactical  issue  here  fought  out. 
The  experience  of  the  preceding  parliament  had 
shown  that  the  party  must  have  more  effective 
control  over  its  representatives.  The  division 
of  forces  in  the  parliament  itself  had  been  upon 
the  tariff.  The  next  campaign  was  fought 


The  Political  Labour  Movement    77 

with  the  labour  platform  as  a  nominal  issue,  but 
with  the  issue  of  party  organisation  equally 
prominent.  The  official  labour  party,  or  "sol- 
idarity" faction,  had  a  formal  platform,  and 
required  a  pledge  from  its  candidates  to  vote 
according  to  the  decision  of  the  caucus — that 
is,  to  make  their  promises  to  the  party  superior 
to  their  promises  to  their  electorates.  The 
"parliamentary  labourists,"  on  the  other  hand, 
pledged  themselves  to  a  programme  announced 
in  their  individual  districts,  and  refused  pri- 
mary allegiance  to  the  general  platform  or  the 
caucus.  The  former  faction  returned  fifteen 
and  the  latter  twelve  members  to  a  reduced 
house.  At  the  following  election,  in  1895,  the 
regular  organisation  men  became  the  sole  direct 
representatives  of  the  political  labour  move- 
ment, and  the  principle  was  established  that  a 
candidate's  pledge  was  primarily  to  his  party, 
and  not  to  his  constituents. 

The  history  of  the  labour  party  in  other 
states  has  few  distinctive  features.  It  has  been 
stronger  in  mining  and  grazing  communities, 
like  Queensland  and  Western  Australia,  than  in 


78    The  Political  Labour  Movement 

agricultural  states,  like  Victoria  and  Tasma- 
nia. The  farmers  are  disposed  to  distrust  the 
city  organisations  and  socialist  land  theories  of 
the  workingmen. 

Since  1891  the  labour  party  has  been  pass- 
ing through  formative  processes  not  yet 
complete.  These  developmental  phases  are  in- 
teresting not  only  to  the  student  of  social  move- 
ments, but  also  to  the  investigator  of  parlia- 
mentary institutions.  They  relate  both  to 
platforms  and  ideals,  and  to  organisation  and 
party  tactics.  In  each  of  these  directions  the 
divergence  from  older  precedents  has  been  pro- 
nounced. An  American  can  appreciate  the 
structural  changes  within  the  party  itself  bet- 
ter than  a  colonial,  because  they  resemble 
changes  that  occurred  in  his  own  country  at  an 
earlier  period. 

The  original  divergence  of  party  organisa- 
tion in  the  United  States  from  that  of  England 
was  probably  caused  by  the  activity  of  town 
meetings  in  the  American  colonies.  These 
township  democracies  retained  control  of  their 
representatives  by  sending  instructed  delegates 


The  Political  Labour  Movement    79 

to  general  assemblies.  They  thus  overthrew 
the  principle  of  responsible  government,  where 
the  people  select  trusted  persons  to  formu- 
late policies  for  them,  and  substituted  a  system 
where  the  people  formulate  policies  and  select 
agents  to  execute  them.  The  relative  promi- 
nence of  the  personal  element  in  the  older  sys- 
tem marks  an  incomplete  transition  from  the 
idea  of  a  ruling  class  to  the  idea  of  absolute 
political  equality.  Both  are  forms  of  democ- 
racy; but  in  the  older  form  the  people  select 
rulers  whom  they  obey,  and  in  the  latter 
they  select  public  servants  to  obey  popular 
behests. 

The  colonial  town  meeting  suggested  the 
unit  of  American  party  organisation,  the 
primary.  The  reluctance  of  the  town  meeting 
to  delegate  its  authority  to  representatives  in 
general  governing  bodies,  except  with  express 
limitations,  was  reflected  in  the  system  of  in- 
structing delegates  to  political  conventions. 
Therefore  the  policy  of  defining  as  distinctly  as 
possible  the  popular  will,  and  enjoining  it  by 
express  commands  upon  the  representatives  of 


8o    The  Political  Labour  Movement 

the  people,  had  a  parallel  development  in  the 
government  and  in  the  party  organisation  of 
the  United  States. 

Australasia,  where  local  government  is  less 
important  than  in  America,  adopted  British 
political  institutions  with  little  modification. 
But  when  the  labour  party  was  formed,  it  rose 
from  a  substratum  of  organised  social  units 
resembling  in  many  respects  the  network  of 
local  governments  upon  which  the  American  po- 
litical system  has  been  erected.  The  working- 
men's  township  was  the  trade  union.  The  mo- 
tives operating  in  America  to  strengthen  popu- 
lar control  over  the  agents  of  the  township  or 
the  primary,  appeared  in  the  trade  unions  as 
soon  as  these  bodies  began  to  associate  for  or- 
ganised effort.  When  the  unions  became  pri- 
maries of  a  political  party,  they  bound  their 
delegates  by  iron-clad  instructions.  The  mem- 
bers strove  to  direct  in  detail  the  action  of  their 
agents.  Practical  considerations  assisted  this 
tendency.  Labour  candidates  were  for  the 
most  part  men  new  to  political  life,  whose  indi- 
vidual discretion  was  not  always  trusted.  This 


The  Political  Labour  Movement    81 

occasioned  the  caucus  and  the  solidarity  pledge. 
As  the  party  was  young  and  without  a  policy 
based  upon  traditions  and  precedents,  it  needed 
a  definite  expression  of  party  principles,  and 
thus  arose  the  platform.  Labour  members, 
might  be  susceptible  to  the  novel  beguilements  of 
wealth  and  power,  and  so  were  required  for- 
mally to  pledge  themselves  to  party  loyalty,  to 
resign  upon  the  demand  of  their  constituents, 
and  not  to  accept  office  from  opposition  parties. 
All  of  these  measures,  dictated  by  the  practical 
necessities  of  the  labour  people,  helped  to  assure 
the  dominance  of  the  party  organisation  in  gov- 
erning political  policy. 

The  American  political  system,  with  its  elect- 
ive executive  and  fixed  term  of  office,  ma- 
tured harmoniously  with  a  party  system 
where  popular  platforms  take  the  place  of 
the  personal  policies  of  candidates.  But 
the  Australian  labour  party,  adopting  our 
principle  of  a  platform  interpreted  by  a 
caucus,  has  come  into  power  in  a  country 
where  the  government  is  constituted  upon  a 
basis  of  personal  leadership  and  discre- 


82    The  Political  Labour  Movement 

tionary  authority.  A  responsible  cabinet  is 
usually  in  a  state  of  unstable  equilibrium.  It 
may  be  overthrown  by  a  change  of  a  few  votes 
in  a  legislative  assembly,  without  appeal  to  the 
people.  Therefore  it  must  hold  ample  discre- 
tionary powers  to  contrive  and  execute  compro- 
mises so  as  to  retain  its  supporters.  But  a  min- 
istry composed  of  men  pledged  to  obey  a  caucus 
must,  if  the  theory  of  party  control  is  main- 
tained, consult  continuously  with  the  caucus. 
However,  a  caucus  does  not  hold  office.  It  is 
responsible  to  its  constituents,  and  not  likely  to 
sacrifice  even  a  minor  point  of  platform  alle- 
giance to  retain  in  power  a  minority  of  its  mem- 
bers, with  the  prospect  of  being  held  to  account 
by  the  actively  alert  body  of  electors  in  the 
primary  organisations.  This  difficulty  of 
reconciling  ministerial  with  party  regimen  was 
manifested  immediately  after  a  labour  cabinet 
was  formed  in  Western  Australia.  The  pre- 
mier declared  in  his  policy  speech  that  in  cer- 
tain details  the  cabinet  did  not  propose  to  sac- 
rifice expediency  to  the  party  platform.  This 
announcement  was  at  once  met  by  resolutions 


The  Political  Labour  Movement    83 

from  the  primaries,  and  by  statements  by  la- 
bour members  of  parliament,  to  the  effect  that 
the  ministers  were  violating  their  party  pledges, 
and  could  not  receive  the  support  of  the  organi- 
sation. This  issue  divided  and  defeated  the 
party  at  the  next  election.  Similar  embarrass- 
ments appeared  in  the  federal  labour  cabinet, 
though  they  did  not  occasion  so  acute  a  crisis. 
Some  labour  leaders  in  both  Australia  and  New- 
Zealand  propose  as  a  remedy  to  substitute  an 
elective  for  a  responsible  executive,  so  that  the 
people  can  choose  their  ministers  directly,  for  a 
fixed  term,  at  a  general  election. 

Party  organisation  varies  in  detail  in  the  dif- 
ferent states,  but  that  of  New  South  Wales  and 
Victoria,  which  is  here  described,  is  fairly  typi- 
cal. The  whole  body  of  active  voters  forms  a 
league,  a  term  borrowed  from  English  political 
nomenclature,  which  indicates  the  character  of 
the  party  constitution — a  federation  of  autono- 
mous societies  having  equal  power  in  pro- 
portion to  their  membership.  These  socie- 
ties are  called  branches,  and  any  citizen 
over  sixteen  years  of  age  may  become  a 


84    The  Political  Labour  Movement 

member  by  subscribing  to  the  platform  and  the 
constitution  of  the  league,  and  paying  an  an- 
nual subscription,  which  is  fixed  at  two  English 
shillings  for  males  and  half  that  sum  for  fe- 
males. Financial  members  of  trade  unions  pay 
half  these  rates.  Unions  may  become  affiliated 
with  the  league,  but  they  usually  differ  from 
branches  because  their  membership  is  distrib- 
uted through  several  election  districts,  while 
the  former  correspond  to  electoral  divisions. 
Manifestly  it  would  not  be  possible  without  sac- 
rificing the  industrial  interests  of  trade  unions, 
especially  where  compulsory  arbitration  exists, 
for  these  organisations  to  confine  their  mem- 
bership to  residents  of  a  single  electorate.  The 
branch  acts  as  a  primary  in  selecting  candi- 
dates and  sending  delegates  to  conventions.  Al- 
though a  trade  union  precedent  is  followed  in 
allowing  persons  over  sixteen  years  old  to  be- 
come members,  only  those  who  have  attained 
their  majority  can  participate  in  the  selection 
of  candidates  and  other  political  duties.  A 
person  moving  from  one  district  to  another 
changes  his  enrolment  to  the  branch  where  he 


The  Political  Labour  Movement    85 

resides,  but  is  not  required  to  change  his  mem- 
bership in  a  union  affiliated  with  a  league.  In 
very  large  districts,  however,  and  in  connection 
with  the  election  of  senators  to  the  federal  par- 
liament, the  trade  unions  are  practically  equiv- 
alent to  branches.  More  than  one  branch  is  al- 
lowed in  the  same  electorate,  but  in  such  cases 
a  convention  of  delegates  from  the  branches  is 
called  to  select  a  precinct  committee.  District 
and  state  committees  are  chosen  in  the  same 
manner,  and  state  conventions  are  held  annu- 
ally, in  which  both  branches  and  trade  unions 
are  represented. 

Party  candidates  are  selected  in  the  first  in- 
stance by  the  branches,  of  which  they  must  be 
members.  Persons  soliciting  or  proposed  for 
office  have  their  names  presented  by  petition  of 
not  less  than  six  members  of  the  league  residing 
in  the  electorate.  No  member  is  allowed  to  sign 
a  petition  for  more  than  one  candidate  for  the 
same  office.  An  exhaustive  ballot  of  all  the 
members  in  the  electorate  is  then  taken,  to  de- 
cide which  of  the  persons  so  proposed  shall 
become  the  official  nominee  of  the  party.  Pro- 


86    The  Political  Labour  Movement 

spective  candidates  must  sign  a  pledge  not  to 
oppose  the  nominee  finally  chosen,  to  vote  with 
the  caucus,  and  to  support  the  party  platform. 
This  practice  of  binding  members  not  to  bolt 
the  party  either  before  or  after  election  makes 
discipline  efficient  and  imposes  at  least  mechani- 
cal harmony. 

The  party  is  financed  by  equal  levies  on  all 
the  members.  Successful  candidates  some- 
times pay  part  of  their  campaign  expenses,  as 
their  public  salaries  are  usually  higher  than 
their  earnings  as  workmen ;  but  large  campaign 
funds  are  unknown  and  unnecessary.  The 
branches  administer  a  portion  of  the  funds  col- 
lected from  their  own  members,  paying  a  pro 
rata  assessment  to  the  district  and  state  com- 
mittees, of  which  account  is  rendered  at  the  an- 
nual convention.  This  system  of  financing 
political  campaigns  seems  far  superior  to  that 
usual  in  the  United  States.  It  is  but  a  trans- 
position of  trade  union  methods  to  a  party 
organisation. 

This  well  disciplined  and  soundly  financed  po- 
litical machine  proves  very  superior  to  the 


The  Political  Labour  Movement    87 

loosely  constituted  parties  previously  in  the 
field.  Although  the  old  organisations  have 
been  entrenched  in  political  power  by  wealth, 
position,  and  privilege,  they  have  yielded 
ground  rapidly  to  their  new  opponent.  This 
is  partly  because  class  support  has  been  given 
to  the  labour  platform;  but  such  support  was 
made  possible  in  Australia  only  by  excellent 
organisation. 

The  party  system  adopted  by  the  labour 
people  strengthens  political  loyalty  by  the  fra- 
ternal sentiment :  for  unions  and  branches  bring 
together  men  of  the  same  class,  pursuits,  and 
sympathies,  much  as  beneficiary  societies  do  in 
other  countries,  and  combine  the  social  with  the 
political  spirit.  For  five  years  before  they 
reach  voting  age,  young  men  and  women  are  en- 
listed in  party  work  and  support,  and  enter  po- 
litical life  with  the  experience  and  confirmed 
convictions  of  veterans,  allied  with  the  enthu- 
siasm of  youth.  As  every  member  contributes 
to  the  support  of  the  party,  he  has  a  taxpay- 
er's interest  in  its  honest  and  efficient  manage- 
ment. He  meets  face  to  face  in  the  branches 


88    The  Political  Labour  Movement 

the  party  leaders.  The  latter  know  the  indi- 
vidual merit  of  their  supporters,  and  where  to 
select  efficient  aides.  Publicity  characterises 
party  administration.  The  same  combination 
of  conditions  that  made  the  old  town  meetings 
produce  public  men  of  high  type  and  training, 
is  slowly  moulding  the  inner  life  of  the  political 
labour  party  in  Australia.  Whatever  one  may 
think  of  the  ideals  that  party  seeks,  he  must 
acknowledge  its  superiority  as  a  training  school 
for  citizens,  and  an  instrument  for  political 
control. 

A  party  platform  grew  up  independenily_j[n 
Australia,  out  of  the  resolutions  adopted  by 
trade  union  congresses  to  guide  labour  commit- 
tees asking  legislation  from  parliament.  \Yiih_ 
the  organisation  of  a  distinct  party,  the  plat- 
form became  more  formal.  In  the  earlier  con- 
ventions, before  delegates  had  been  sobered  by 
political  experience,  every  man  brought  for- 
ward his  pet  scheme  for  reforming  society,  and 
usually  received  some  recognition  in  the  inter- 
est of  harmony.  This  practice  made  long  plat- 
forms, portions  of  which  were  not  taken  seri- 


The  Political  Labour  Movement    89 

ously  by  the  voters,  and  so  the  moral  advantage 
of  a  formal  enunciation  of  party  principles  war 
lost.  Therefore  the  custom  arose  of  putting 
forward  the  main  issues  of  a  campaign  in  a 
concise  "fighting  platform,"  adding  a  more 
or  less  general  platform,  composed  of  planks  of 
local  or  secondary  importance,  and  resolutions 
adopted  to  placate  the  inevitable  crank  ele- 
ment of  the  conventions. 

The  platform  has  won  the  party  popular 
support.  A  positive  programme  is  attractive. 
The  promise  to  do  new  things  appeals  to  the 
latent  discontent  of  a  community.  Clear-cut 
statements  count  for  more  with  the  mass  of 
electors  than  the  philosophical  and  habitually 
accommodating  and  hazy  policies  which  the 
old  party  leaders  offer  their  constituents.  La- 
bour voters  look  upon  the  platform  as  their  own 
policy,  while  conservative  voters  must  accept  a 
policy  presented  to  them.  Besides,  in  a  coun- 
try where  the  people  have  not  been  sobered  by 
the  tense  competition  of  older  lands,  and  still 
retain  the  chronic  hopefulness  of  the  prospector 
and  the  pioneer,  it  is  harder  to  work  up  en- 


90    The  Political  Labour  Movement 

thusiasm  for  maintaining  the  status  quo, 
than  for  a  proposal  to  overturn  it.  Many  re- 
forms espoused  by  the  labour  platform  have  an- 
swered popular  demands  that  would  have  been 
even  more  urgently  expressed  in  America  than 
in  Australia.  This  is  particularly  true  of  the 
electoral  reforms  which  made  the  issue  upon 
which  the  party  was  supported  through  the 
perils  of  infancy.  Though  these  reforms  were 
endorsed  and  realised  by  conservative  ministers, 
the  credit  went  to  the  party  that  had  published 
its  support  most  widely  and  prominently. 
Therefore  the  platform  has  served  the  purpose 
of  an  advertising  organ,  through  which  labour 
leaders  have  announced  their  projects  and  pro- 
claimed their  accomplishments,  and,  like  all 
effective  advertising,  it  has  brought  them 
business. 

The  party  has  been  further  favoured  by  its 
comparative  freedom  from  local  precedents, 
traditions,  and  inter-state  jealousies,  and  the 
ready  support  it  consequently  gave  the  national 
ideal  of  federation.  The  workers  of  Australia 
had  been  thinking  federally  on  matters  of  vital 


The  Political  Labour  Movement    91 

interest  to  them  for  twenty  years  when  the  old 
parties  awoke  to  find  the  Commonwealth  an  ac- 
complished fact.  Each  colony  had  its  Clintons 
and  Adamses,  men  long  prominent  in  local  public 
life,  who  assumed  that  they  would  occupy  the 
same  position  in  the  larger  sphere  of  political 
activity  now  open  to  them.  State  rather  than 
party  lines  defined  the  cleavage  of  their  rival- 
ries. The  same  boundaries  had  in  some  in- 
stances determined  divisions  upon  the  whole  fed- 
eral question  and  details  of  the  constitution, 
creating  hostilities  and  diverse  views  of  inter- 
pretation which  were  carried  over  into  the  new 
government.  A  similar  cross  division  existed 
in  party  policies.  New  South  Wales  had  been 
a  free-trade  and  Victoria  a  protection  colony. 
On  this  question  conservatives  in  these  two 
states  were  arranged  in  opposition  as  soon  as 
they  met  in  a  national  legislature.  The  old 
parties,  too,  were  grouped  with  reference  to  the 
fiscal  issue  in  single  states.  But  with  the  tariff 
as  a  national  question,  and  its  adjustment  to  a 
thousand  local  interests  to  be  considered,  the 
former  party  alignment  was  destroyed  even  in 


92    The  Political  Labour  Movement 

the  same  electorates.  A  colonial  free  trader  be- 
came a  Commonwealth  protectionist,  and  the  re- 
verse. Finally,  entirely  new  questions,  which 
parties  organised  on  local  lines  were  not  pre- 
pared to  meet,  appeared  on  the  political  hori- 
zon, rivalling  the  tariff  itself  in  immediate 
interest. 

Amid  all  these  new  conditions,  so  confusing  to 
the  older  parties,  the  course  of  labour  poli- 
ticians lay  comparatively  clear.  They  had 
long  ago — after  their  humiliating  experience 
in  New  South  Wales — agreed  to  subordinate 
the  tariff  to  strictly  labour  issues.  But  con- 
sistently with  their  ideas  of  State  control  of 
industry,  they  were  for  the  most  part  protec- 
tionists, and  more  decidedly  so  with  protection 
as  a  national  than  as  a  colonial  policy.  Their 
party  organisation  was  already  inter-state,  so 
that  questions  of  personal  leadership  were  al- 
ready settled;  and  they  had  consistently  sup- 
ported federation,  so  they  were  sympathetically 
disposed  towards  the  new  government.  Mean- 
time the  measures  chiefly  sought  by  the  work- 
ing people  could  be  most  effectively  secured 


The  Political  Labour  Movement    93 

through  a  central  government.  This  had  been 
sufficiently  foreseen  to  determine  the  federal 
policy  of  their  leaders. 

The  labour  party  is  the  loose  constructionist 
party  of  the  Commonwealth.  Workingmen  as- 
sume this  position  because  of  the  laws  they  ad- 
vocate, not  from  abstract  reasoning  upon  the 
powers  of  government.  This  attitude  is 
strengthened  by  the  fact  that  the  liberal  federal 
franchise  gives  them  more  influence  in  the  cen- 
tral parliament  than  in  the  local  legislatures. 
But  primarily  it  is  the  logic  of  their  political 
platform  that  makes  the  labour  people  em- 
phasise central  at  the  expense  of  state  author- 
ity. They  look  to  the  federal  government  to 
protect  them  from  an  invasion  of  alien  labour 
from  neighbouring  Asia.  That  government 
can  more  easily  handle  old-age  pensions  than 
the  separate  states,  because  it  controls  the  cus- 
toms revenues,  and  can  prescribe  a  uniform  law 
for  the  entire  Commonwealth.  An  important 
fraction  of  the  workingmen  engaged  in  mari- 
time trades  is  chiefly  interested  in  navigation 
laws,  which  are  under  federal  control.  Most 


94    The  Political  Labour  Movement 

important  of  all,  compulsory  arbitration,  which 
involves  government  regulation  of  industry  and 
partly  realises  state  socialist  ideals,  belongs 
properly  to  the  authority  that  makes  the  tariff. 
For  a  local  court,  regulating  wages  and  other 
terms  of  employment  affecting  the  cost  of 
production,  must  consider  the  conditions  of 
competition  in  each  industry.  Over  these  con- 
ditions, so  far  as  they  relate  to  merchandise  ex- 
changed among  the  states,  it  has  no  control. 
But  a  national  government  prescribing  uniform 
conditions  of  domestic  production  can  guard 
these  by  its  tariff  legislation.  So  workers 
think  that  the  tariff  area  and  the  area  regu- 
lated by  compulsory  arbitration  should  coin- 
cide. Such  considerations  as  these  have  made 
the  labourists  the  consistent  ultra-federalists  of 
Australia. 

The  growth  of  the  labour  party  has  not  been 
continuous  in  every  state  since  1891,  but  each 
campaign  has  increased  its  average  strength  in 
the  entire  country.  At  the  last  Commonwealth 
election  the  labour  delegation  in  the  senate  rose 
from  less  than  a  fourth  to  nearly  half  the 


The  Political  Labour  Movement    95 

members,  and  a  smaller  but  decided  gain  was 
made  in  the  house  of  representatives.  Labour 
is  strongly  represented  in  the  lower  branch  of 
the  state  legislatures,  and  has  small  delegations 
in  the  upper  house  of  Victoria,  South  Australia, 
and  Western  Australia,  where  legislative  coun- 
cillors are  elected.  The  large  radical  element 
in  the  federal  senate  is  due  to  the  method  of 
election.  Senators  are  chosen  directly  by  the 
people  of  the  states  as  single  electorates,  so  the 
preponderance  of  wage-earners  is  fully  mani- 
fested in  the  popular  vote.  Members  of  the 
house  are  chosen  by  districts,  so  the  massing  of 
the  wage-earning  population  in  cities  and  min- 
ing camps  causes  them  to  waste  strength  in 
piling  up  large  majorities  for  fewer  candi- 
dates. However,  as  the  states  are  equally  rep- 
resented in  the  senate,  and  labour  senators  are 
mostly  from  thinly  populated  states,  they  are 
elected  by  a  smaller  number  of  voters  than  the 
conservative  senators  from  New  South  Wales 
and  Victoria.  The  strength  of  the  party  in 
the  federal  house  is  increased  by  the  alliance  of 
several  independent  and  protectionist  members, 


96    1'he  Political  Labour  Movement 

whose  political  tenure  depends  upon  the  support 
of  workingmen. 

Labour  leaders  had  no  opportunity  to  show 
what  they  would  do  as  executive  officers  until 
1904,  when  the  second  of  the  two  protectionist 
ministries  that  had  directed  the  federal  govern- 
ment since  its  institution,  in  1901,  went  out 
of  office.  A  labour  cabinet  was  then  formed 
under  Mr.  J.  C.  Watson,  a  young  man  who  en- 
tered politics  in  New  South  Wales,  where  he  had 
previously  been  a  compositor  on  a  Sydney  news- 
paper. Six  of  the  seven  other  members  of  the 
ministry  were  workingmen,  and  the  attorney- 
general  was  an  independent  politician  allied 
with  the  labour  party.  This  cabinet  held  office 
from  April  until  the  following  August,  when  it 
resigned  in  face  of  a  coalition  of  protectionists 
and  free  traders,  whose  compromise  programme 
contained  nearly  every  proposal  of  their  labour 
opponents,  including  old-age  pensions  and  fed- 
eral compulsory  arbitration.  Labour  cabinets 
have  been  formed  more  recently  in  three  states, 
two  of  which  still  remain. 

By  these  successes  the  party  is  gradually 


The  Political  Labour  Movement    97 

driving  its  opponents  into  a  single  organisation,  / 
thus  making  the  labour  platform  a  direct  issue 
in  politics.  Hitherto  conservative  ministers 
have  endorsed  labour  legislation,  in  order  to  re- 
tain office.  Though  this  legislation  could  not 
go  far  beyond  limits  set  by  public  opinion,  still 
these  measures  were  not  submitted  directly  to 
the  people.  Voters  could  say  a  direct  yes,  but 
not  a  direct  no,  to  the  labour  platform;  be- 
cause however  they  voted,  they  put  in  power 
a  party  that  could  carry  out  its  policy  only 
by  making  concessions  to  the  workingmen  in 
parliament. 

Radical  legislation  may  be  checked  by  this 
new  condition,  as  with  a  united  opposition  the 
policy  of  support  in  return  for  concessions  must 
be  abandoned.  Moreover  the  industrial  pro- 
jects of  the  working  people  are  coming  more 
prominently  to  the  fore  with  the  attainment  of 
political  reforms  previously  engaging  public 
attention.  But  these  later  measures  are  those 
upon  which  there  is  least  unanimity  of  opinion, 
and  which  will  therefore  receive  less  support 
from  neutral  classes. 


UNIVERSITY 

VOF 
/•».  .  ..  t      ^ 


98    The  Political  Labour  Movement 

The  economic  conditions  in  New  Zealand  call- 
ing for  legislative  reform,  did  not  affect  wage- 
earners  so  exclusively  as  those  in  Australia. 
Prior  to  1890  conservative  influences  were  pre- 
dominant, and  had  controlled  the  government 
almost  without  interruption  for  three  decades. 
The  conservatives  were  kept  in  power  by  fran- 
chise restrictions  that  repressed  the  democratic 
sentiment  of  the  people.  Many  young  New 
Zealanders  were  migrating  from  the  country. 
So  when  the  liberals,  tired  of  being  in  a  perpet- 
ual minority,  allied  themselves  with  the  new 
force  of  workingmen,  who  had  entered  politics 
after  the  electoral  reforms  of  1889,  their  policy 
was  determined  by  the  radical  wing  of  the 
party.  Public  sentiment  was  ripe  for  changes 
in  both  land  and  labour  legislation,  and  these 
two  classes  of  measures  went  side  by  side.  The 
farmer  was  as  fully  identified  with  the  new 
movement  as  the  wage-earner.  This  explains 
why  a  single  premier  held  office  for  fourteen 
years,  and  a  "progressive"  cabinet  has  been  in 
power  since  1891.  Workingmen  have  not 
formed  a  class  party ;  but  have  allied  themselves 


The  Political  Labour  Movement    99 

with  the  people  to  oppose  a  class  party  of 
landed  proprietors.  Therefore  the  legislative 
reforms  they  have  secured  are  more  directly  en- 
dorsed by  the  voters  than  those  hitherto  ob- 
tained by  the  labour  party  in  Australia. 

While  progressive  laws  were  more  speedily  en- 
acted in  New  Zealand,  because  a  wider  constitu- 
ency co-operated  in  their  support,  this  broad 
party  basis  has  checked  many  radical  pro- 
jects. The  "whole  people" — in  a  sense  not 
strictly  accurate,  but  generally  understood  in 
America — will  accompany  the  advanced  re- 
former a  short  way  with  alacrity,  then  suddenly 
demand  the  most  cautious  progress.  This  has 
been  so  true  in  New  Zealand  that  some  labour 
leaders  advocate  parting  from  their  liberal  al- 
lies, because  the  latter  will  not  grant  them  fur- 
ther concessions.  But  the  workingmen  of  the 
colony  would  gain  little  by  independent  action, 
as  their  success  is  conditioned  by  the  support  of 
the  rural  classes. 

A  new  phase  of  the  political  labour  move- 
ment is  now  appearing  in  both  New  Zealand  and 
Australia,  due  to  a  clearer  definition  of  issues, 


ioo    The  Political  Labour  Movement 

an  awakened  consciousness  of  the  full  implica- 
tions and  consequences  of  labour  policy,  and 
broader  reflection  upon  the  ideals  and  un- 
derlying theories  of  government  control  of 
industry. 


CHAPTER  V 
THE  LABOUR  PROGRAMME 

THE  programme  of  the  labour  movement  in 
Australasia  is  growing  and  is  still  in  process 
of  realisation.  Its  ultimate  ends,  therefore, 
are  defined  by  ideals  rather  than  by  specific 
measures.  Workmen,  to  be  sure,  are  directly 
interested  in  concrete  objects,  which  can  be 
embodied  in  definite  legislation  or  adminis- 
trative policies.  Most  of  the  voters  who 
support  labour  measures  in  Australasia  do  not 
look  ahead  of  one  or  two  laws  which  they  wish 
placed  on  the  statute  books.  Yet  each  law 
enacted  suggests  another  with  still  more  at- 
tractive possibilities.  So  there  is  no  finality  in 
the  programme  of  workingmen.  But  the 
present  trend  of  policy  can  be  determined  by 
comparing  the  earliest  attainments  with  the 
latest  proposals  of  labour  leaders. 

The    first    measure    secured    by    the    labour 

IOZ 


102       The  Labour  Programme 

party  in  New  South  Wales  was  an  act  equalis- 
ing suffrage.  In  South  Australia  the  party 
supported  adult  suffrage  for  the  lower  house 
of  parliament,  and  is  now  seeking  to  extend  the 
same  provision  to  electors  of  the  upper  house. 
Victoria  was  already  under  a  constitution  more 
democratic  than  that  of  the  other  colonies. 
Labour  members  have  been  active  in  securing 
free  schools  in  South  Australia,  and  have 
agitated  continuously  for  the  same  reform  in 
New  South  Wales.  Woman  suffrage  has  come 
in  New  Zealand  and  four  states  of  the  Common- 
wealth, and  been  adopted  in  federal  elections, 
with  the  support  of  the  workingmen.  Working 
women  are  usually  more  ardent  politicians  than 
their  sisters  of  the  well-to-do  classes. 

Nearly  every  labour  platform  in  Australasia 
advocates  abolishing  the  legislative  councils. 
There  is  no  opposition  to  the  federal  senate, 
and  the  party  has  not  espoused  a  constitutional 
theory  hostile  to  bicameral  legislatures.  But 
the  upper  chamber  of  the  state  and  colonial 
parliaments  has  regularly  opposed  the  popular 
measures  sought  by  workingmen,  and  is  re- 


The  Labour  Programme       103 

garded  as  hostile  to  democratic  and  labour 
legislation.  Economy  as  well  as  expediency  is 
said  to  demand  a  single  house.  The  same  argu- 
ment is  advanced  in  support  of  a  second 
proposal  popular  with  the  workingmen,  to 
abolish  the  royal  governors  in  the  separate 
states,  leaving  the  governor-general  of  the 
Commonwealth  the  only  imperial  official.  The 
office  is  chiefly  ornamental,  and  the  salary 
of  twenty  thousand  dollars  or  twenty-five 
thousand  dollars,  with  residence  and  some- 
times with  special  allowances,  is  a  considerable 
item  in  the  local  budgets.  Many  workingmen 
desire  to  abolish  the  governorship  in  New 
Zealand,  and  the  ultra-radicals  in  Australia 
prefer  to  be  without  the  King's  representative 
even  at  the  federal  capital.  The  initiative  and 
referendum  are  everywhere  advocated  by  the 
party. 

Although  the  industrial  demands  of  the  la- 
bour people  commit  them  to  a  strong  central 
government,  they  favour  extending  town  and 
county  organisation.  The  interest  of  the  party 
in  this  phase  of  local  government  is  confined 


IO4       The  Labour  Programme 

principally  to  three  points — securing  equal  and 
universal  suffrage  in  town  elections,  limiting 
taxation  to  the  value  of  land  irrespective  of 
improvements,  and  empowering  local  authorities 
to  establish  and  conduct  industries.  In  New 
Zealand,  where  the  method  of  taxing  land  for 
local  purposes  is  settled  by  local  option,  a 
large  majority  of  the  towns  have  voted  to  make 
their  assessments  upon  its  unimproved  value. 

As  demands  for  constitutional  reform  are 
significantly  absent  from  the  federal  labour 
platform,  it  is  fair  to  assume  that  the  organic 
law  of  the  Commonwealth  is  in  the  main  satis- 
factory to  workingmen.  Their  political  pro- 
gramme is  only  to  eliminate  class  privilege  in 
government. 

Land  and  taxation  are  prominent  in  the 
state  platforms,  but  the  federal  platform  does 
not  consider  them,  because  the  Commonwealth 
does  not  control  public  lands,  and  raises  its 
revenue  chiefly  by  a  national  tariff.  New 
Zealand  took  the  lead  in  this  sphere  of 
legislation,  and  the  measures  adopted  in  that 
colony  form  an  ideal  toward  which  the 


The  Labour  Programme       105 

party  in  several  states  of  the  Commonwealth  is 
striving.  Land  taxation  is  confined  to  un- 
improved values,  and  mortgages  are  taxed 
against  the  mortgagee.  In  addition  to  the 
ordinary  tax,  there  is  a  graduated  tax  upon  all 
land  having  an  unimproved  value  of  more  than 
five  thousand  pounds  sterling.  This  increment 
has  recently  been  increased,  and  now  varies  from 
one-fourth  of  a  mill  on  estates  not  exceeding 
fifty  thousand  dollars,  to  over  twelve  mills  on 
very  large  holdings.  Thus  the  largest  land- 
owners pay  altogether  over  a  cent  and  one-half 
taxes  for  every  dollar  they  have  invested  in 
land,  while  the  small  farmer,  whose  real  prop- 
erty exclusive  of  improvements  is  valued  at  less 
than  five  hundred  pounds,  or  about  twenty-five 
hundred  dollars,  is  exempted  from  taxation. 
Such  a  law  affords  more  revenue  in  New  Zea- 
land, where  the  land  is  mostly  held  by  a  very 
few  people,  than  it  would  in  the  United  States, 
where  land  is  subdivided  into  farms  of  moderate 
extent.  Of  the  115,713  land-owners  in  the  col- 
ony, 22,778  pay  a  tax  on  their  estate,  and  the 
remainder  are  exempt  under  the  law.  About 


106       The  Labour  Programme 

two-sevenths  of  the  revenue  from  land  taxes  is 
from  the  graduated  tax. 

The  old  personal  property  tax  has  been 
abolished  in  New  Zealand,  and  in  its  place  is  an 
income  tax,  which  is  also  graduated.  Incomes 
of  less  than  three  hundred  pounds  (and  fifty 
pounds  life  insurance  premiums)  are  exempt, 
the  rate  is  equivalent  to  two  and  a  half  cents  on 
the  dollar  for  the  first  taxable  thousand  pounds, 
and  five  cents  on  the  dollar  for  larger  incomes. 
The  principle  of  progressive  land  taxation  has 
been  applied  in  Victoria,  South  Australia,  and 
Tasmania,  and  taxation  is  based  on  unimproved 
land  values  in  New  South  Wales  and  South 
Australia.  The  income  tax  levied  in  several  of 
the  states  is  graduated,  and  is  usually  lower  on 
incomes  derived  from  personal  exertion  than 
upon  those  derived  from  property.  These  tax 
laws  are  popular  with  the  mass  of  voters;  but 
they  have  not  revolutionised  the  distribution  of 
property. 

The  labour  party  favours  resuming  large 
estates  for  closer  settlement,  if  necessary  by 
condemnation.  This  policy  was  forced  upon 


The  Labour  Programme       107 

New  Zealand,  by  the  monopoly  of  arable  land 
by  a  few  proprietors  soon  after  the  colony  was 
founded,  and  has  been  adopted  in  South 
Australia.  Large  holdings  are  resumed  by  the 
government  in  other  states  when  offered  for 
sale  by  the  owners,  and  compulsory  resumption 
is  likely  to  extend.  The  demand  for  agri- 
cultural lands  among  tenant  farmers  and  the 
sons  of  small  proprietors  nearly  always  exceeds 
the  supply.  However  these  laws,  and  those 
relating  to  public  land  administration,  are  due 
to  agrarian  rather  than  to  labour  agitation,  and 
are  more  vigorously  agitated  in  farming  com- 
munities, like  New  Zealand,  Tasmania,  and 
Victoria,  than  in  states  where  wage-earners  are 
dominant. 

Several  laws  were  enacted  by  the  Australian 
colonies,  in  the  last  years  before  federation,  for 
the  purpose  of  encouraging  co-operative  land 
settlements  and  village  communities.  These 
measures  contained  features  similar  to  those 
successfully  applied  by  the  New  England  col- 
onies in  the  seventeenth  century.  But  they  have 
not  succeeded  in  Australasia,  and  though 


io8       The  Labour  Programme 

favoured  bj  the  working  people  as  political 
projects,  have  not  received  their  support  as 
industrial  enterprises. 

The  main  feature  of  the  land  policy  of  the 
labour  party  is  its  advocacy  of  nationalisation. 
Such  an  attainment  seems  nearer  realisation  to 
an  Australasian  than  to  an  American.  For  in 
the  colonies  much  of  the  original  public  domain 
still  belongs  to  the  State,  though  occupied  by 
private  tenants.  The  grazing  lands  are  largely 
held  under  pastoral  leases.  By  not  alienating 
more  public  land  and  repurchasing  large  pri- 
vate holdings,  the  labour  people  hope  gradually 
to  make  private  ownership  the  exception.  Their 
plan  is  to  allot  land  to  settlers  under  leasehold 
and  make  the  government  the  universal  land- 
lord. Upon  this  issue  workingmen  part  com- 
pany with  the  farmers.  Their  policy  is  con- 
sistent with  the  governing  principle  of  the  whole 
labour  programme,  which  is  public  ownership 
of  the  means  of  production. 

The  industrial  laws  advocated  by  the  labour 
party  look  toward  State  control  of  industry  by 
regulating  conditions  of  employment.  This 


The  Labour  Programme       109 

legislation  flows  from  two  sources,  parliament 
and  boards  or  courts,  with  delegated  authority 
in  industrial  matters,  instituted  by  general 
statute.  The  activity  and  powers  of  these 
subordinate  bodies  are  so  great  that  direct  leg- 
islation is  relatively  unimportant  in  the  eyes 
of  workingmen.  Nevertheless  the  parliamen- 
tary acts  constitute  a  code  of  some  dimensions. 
The  labour  laws  of  New  Zealand  include  fifty- 
six  separate  statutes,  and  form  a  volume  of  428 
pages.  The  most  advanced  of  these  laws,  ex- 
cepting compulsory  arbitration,  is  the  Workers' 
Compensation  Act,  which  is  based  upon  the 
English  statute,  and  imposes  on  employers  a 
degree  of  liability  for  accidents  to  workmen 
not  recognised  in  the  United  States.  Our 
liability  laws  enable  a  worker  to  secure  damages 
for  an  accident  incurred  in  service  only  when 
his  employer  has  been  negligent ;  the  Compensa- 
tion Act  makes  the  employer  liable  to  a  limited 
sum  for  all  injuries  received  by  workmen  while 
engaged  in  his  service,  without  regard  to  negli- 
gence. Such  a  la«w  is  now  in  force  in  New 
Zealand,  Sotith  Australia,  Western  Australia, 


iio       The  Labour  Programme 

and  Queensland.  The  effect  is  to  make  the 
employer  insure  his  business  against  every  claim 
for  injuries  received  by  his  employees.  Un- 
avoidable personal  accidents  become  a  charge 
upon  the  business,  instead  of  upon  individual 
workmen,  resting  equally  on  competing  employ- 
ers, and  the  law  is  not  generally  felt  to  be  a 
hardship. 

The  factory  legislation  of  the  colonies  is 
more  detailed  and  exhaustive  than  our  own. 
Laws  compelling  the  early  closing  of  shops  and 
half  holidays  are  common,  and  the  amount  of 
overtime  that  can  be  worked  in  a  factory  is 
limited.  Child  labour  in  factories  is  forbidden 
or  discouraged,  and  the  eight-hour  day  indi- 
rectly imposed  even  for  adults.  Provisions  for 
inspection  and  the  enforcement  of  the  laws  are 
more  ample  than  in  America.  Factory  and 
mine  sanitation  are  closely  regulated,  though 
without  affecting  actual  conditions  much  more 
than  enlightened  self-interest  and  voluntary 
action  in  America.  The  laws  of  England  have 
been  a  common  source  of  legislation  for  Aus- 
tralasia and  the  United  States  in  matters 


The  Labour  Programme       1 1 1 

relating  to  the  time,  form  of  payment,  and 
security  for  wages.  The  two  chief  measures 
workingmen  now  seek  are  a  statutory  eight- 
hour  day  and  minimum  wage.  The  compara- 
tive moderation  of  these  demands,  which  would 
be  endorsed  by  trade  unionists  everywhere,  is 
due  to  another  channel  for  making  the  desires 
of  labour  effective.  The  real  industrial  ends 
of  the  labour  movement  are  revealed  in  com- 
pulsory arbitration. 

The  seven  planks  of  the  federal  "fight- 
ing platform"  are — maintenance  of  a  White 
Australia;  compulsory  arbitration;  old-age 
pensions '^nationalisation  of  monopolies ;,  citizen 
defence  force  and  Australian-owned  navy ; 
'  restriction  of  public  borrowing  ;,and  navigation 
laws,  providing  among  other  things  for  the 
"protection  of  Australian  shipping  against 
unfair  competition."  The  general  platform 
calls  for  a  Commonwealth  bank  of  deposit  and 
issue,  federal  life  and  fire  insurance,  and  a 
federal  patent  law.  None  of  the  planks  is 
wholly  experimental.  The  "White  Australia" 
policy  has  been  adopted.  Compulsory  arbitra- 


H2       The  Labour  Programme 

tion  and  old-age  pensions  exist  in  two  states  of 
the  Commonwealth  and  in  New  Zealand.  The 
four  following  planks  are  based  upon  legislation 
in  other  countries.  England  has  a  national 
bank,  New  Zealand  state  life  and  fire  insurance, 
and  a  federal  patent  law  such  as  Australia 
desires  is  in  force  in  the  United  States. 

A  clause  of  the  federal  constitution  gives 
parliament  authority  to  provide  for  "concilia- 
tion and  arbitration  of  industrial  disputes 
extending  beyond  the  limits  of  any  one  state." 
Another  clause  grants  the  central  government 
the  right  to  legislate  in  regard  to  any  matter 
referred  to  it  by  any  state  or  group  of  states, 
such  legislation  to  affect  only  states  consenting 
thereto.  The  Commonwealth  parliament  also 
has  power  to  legislate  with  regard  to  "trade 
and  commerce  with  other  countries  and  among 
the  states."  By  the  imperial  act  constituting 
the  Commonwealth,  the  British  government 
delegates  to  the  federal  parliament  authority  to 
make  laws  which  shall  be  in  force  "on  all  ships, 
the  King's  ships  of  war  excepted,  whose  first 
port  of  clearance  and  whose  port  of  destination 


The  Labour  Programme       1 1 3 

are  in  the  Commonwealth."  Therefore  the 
aggregate  authority  to  legislate  in  industrial 
matters  is  considerable,  but  it  is  not  yet  de- 
fined by  court  interpretation. 

The  constitution  further  gives  parliament 
authority  to  provide  for  "invalid  and  old-age 
pensions."  New  Zealand  enacted  the  pioneer 
old-age  pension  law  in  1898;  and  has  been 
followed  by  Victoria  and  New  South  Wales. 
All  three  statutes  place  the  age  qualifying  a 
person  to  receive  this  bounty  at  sixty-five  years, 
but  in  New  South  Wales  a  person  sixty  years 
old  is  granted  a  pension  if  incapacitated  by 
sickness  or  injury  from  earning  a  livelihood. 
Pensioners  must  have  resided  in  New  Zealand 
or  New  South  Wales  twenty-five  years,  and  in 
Victoria  twenty  years.  The  amount  of  the  pen- 
sion varies  from  $8.45  a  month  in  Victoria  to  a 
possible  $10.50  a  month  in  New  Zealand — to 
which  sum  it  has  recently  been  increased  from 
$7.25  a  month — but  may  be  less  if  a  person 
owns  property,  or  where  a  husband  and  wife 
living  together  are  both  pensioners.  A  pen- 
sioner is  allowed  to  supplement  this  money  in 


ii4       The  Labour  Programme 

New  Zealand  and  New  South  Wales  by  the 
product  of  his  own  exertion,  so  long  as  his 
income  does  not  exceed  a  pound  sterling  a  week, 
or  about  twenty  dollars  a  month.  If  he  proves 
his  ability  to  earn  a  higher  wage,  or  has  income 
from  property,  his  pension  is  correspondingly 
diminished  or  ceases  entirely.  Of  those  qualified 
by  age  and  residence  to  receive  pensions  21  per 
cent,  in  Victoria,  38  per  cent,  in  New  Zealand, 
and  48  per  cent,  in  New  South  Wales  are  upon 
the  rolls.  The  number  of  pensioners  in  New 
Zealand  has  fallen  from  12,776,  in  1902,  to 
11,138,  in  1905,  and  the  expense  of  pensions 
from  $1,059,001  to  $968,860.  The  latter  sum 
will  be  increased  about  one-half  by  the  recent 
amendment  to  the  law.  The  estimated  cost  of 
old-age  pensions,  if  made  universal  through 
the  Commonwealth,  would  be  about  $1.83  per 
capita  of  the  population.  This  would  make 
the  cost  to  the  taxpayers  of  such  a  law  in  the 
United  States,  if  carried  out  on  the  more  liberal 
basis  of  New  Zealand  and  New  South  Wales, 
about  the  same  as  our  present  army  pensions, 
for  which  we  have  paid  over  $1.80  per  capita 


The  Labour  Programme       115 

per  annum  for  several  years  of  the  last  decade. 
The  labour  party  advocates  lowering  the  age 
limit  for  pensions  to  sixty  years,  without  re- 
quiring incapacity.  They  assert  that  a  federal 
act  would  simplify  the  administration  of  these 
laws,  place  the  financial  burden  upon  the  cus- 
toms revenues,  where  it  would  be  least  felt,  and 
enable  many  old  residents  of  Australia,  mostly 
native-born,  who  are  justly  entitled  to  pensions 
but  excluded  because  they  have  not  resided  con- 
tinuously in  one  state,  to  receive  the  benefit  of 
this  legislation. 

No  attempt  has  been  made  to  nationalise 
industrial  monopolies  in  Australasia.  The  rail- 
ways are  already  government  property.  In 
New  Zealand  the  government  proposes  to  absorb 
the  tobacco  industry,  and  a  similar  project  was 
advanced,  in  1904,  by  the  Commonwealth  labour 
ministry.  Nationalisation  enterprises  have 
more  academic  than  practical  interest  for 
workingmen  at  present,  because  they  are  occu- 
pied with  matters  of  greater  immediate  concern 
and  political  expediency.  The  large  public 
debt  and  consequent  burden  of  taxation  must  be 


1 1 6       The  Labour  Programme 

lightened  before  radical  steps  can  be  taken 
towards  government  ownership  of  industries. 
Workers  prefer  for  the  present  to  control  in- 
dustry as  organised  under  private  ownership, 
rather  than  to  conduct  such  undertakings  as 
public  enterprises. 

The  first  platform  of  the  labour  party  in  New 
South  Wales  contained  a  plank  in  favour  of 
"federation  of  the  Australian  colonies  on  a 
national  as  opposed  to  an  imperial  basis."  This 
has  continued  to  be  the  attitude  of  the  work- 
ingmen  of  Australia  towards  imperial  relations. 
The  same  considerations  that  make  them  favour 
a  strong  central  government,  make  them  look 
with  disfavour  upon  too  close  a  bond  with  the 
mother  country.  In  this  they  are  guided  by 
practical  interest  rather  than  by  sentiment, 
though  the  former  may  in  time  mould  the  latter. 
England  is  the  Australian  manufacturer's  in- 
dustrial competitor.  English  goods  may  be 
favoured  by  the  importer,  but  they  mean  less 
trade  for  the  factory  owner  and  less  work  for 
the  operative.  These  antagonistic  industrial 
interests  are  felt  by  workers.  They  come  more 


The  Labour  Programme       117 

prominently  to  the  fore  in  case  of  immigration. 
Upon  two  occasions  lately  workingmen  have 
tried  to  exclude  from  Australia  British  mechan- 
ics coming  to  the  country  under  contract.  One 
constant  fear  of  the  Australian  is  that  he  may 
be  swamped  by  the  competition  of  coloured 
subjects  of  the  Empire,  and  toward  this  danger 
he  has  directed  drastic  legislation.  Coastal 
seamen  are  jealous  of  the  competition  of  British 
shipping,  and  look  forward  to  Australian  inde- 
pendence upon  the  sea.  The  labour  party 
might,  as  readily  as  the  conservative  parties, 
grant  preferential  trade  to  the  mother  country, 
from  a  feeling  of  common  race  and  sentiment 
with  British  workingmen.  But  it  would  make 
no  concessions  prejudicial  to  home  industries,  or 
open  the  gates  to  an  immigration  of  British 
workmen  coming  to  assured  positions  in  the 
Commonwealth.  While  not  hostile  to  Great 
Britain,  the  workingmen  of  Australasia  proba- 
bly attach  less  weight  to  imperial  ties  than  the 
conservatives.  The  governing  classes  of  Eng- 
land have  not  been  in  sympathy  with  the 
social-democratic  movement  in  the  colonies. 


1 1 8       The  Labour  Programme 

Australasian  workingmen  realise  this.  Many 
of  them  receive  their  most  vivid  impression  of 
the  motherland  from  a  royal  governor,  whose 
lordly  revenues  their  taxes  pay,  and  whose  social 
sympathies  are  generally  with  the  class  oppos- 
ing them.  But  any  alienation  that  may  exist 
has  only  sentimental  import.  The  relation  of 
the  Empire  to  the  Australasian  democracies  is 
too  sagaciously  arranged  to  be  materially  af- 
fected by  a  divergence  of  local  policies. 

The  practical  objects  of  the  labour  party 
are  not  so  much  socialist  as  social-democratic. 
They  look  toward  collectivism,  but  recognise 
wages,  profits,  and  the  conditions  of  capitalist 
production  as  matters  to  be  accepted  in  present 
legislation.  Here  the  party  breaks  with  doc- 
trinaire socialists,  of  whom  there  are  a  few  in 
Australia  and  New  Zealand,  whose  active  but 
not  very  formidable  opposition  it  is  obliged  to 
meet.  Australian  labour  leaders  know  little  or 
nothing  of  Marxian  theories.  Few  of  them 
know  even  by  title  the  principal  text-books  of 
Continental  socialism.  The  writings  of  Henry 
George  and  Edward  Bellamy  did  something  to 


The  Labour  Programme       1 1 9 

popularise  collectivist  doctrines.  The  Knights 
of  Labour  enrolled  many  recruits  in  both  Aus- 
tralia and  New  Zealand  at  one  time,  and  the 
first  progressive  premier  of  the  latter  colony 
was  a  member  of  that  body.  More  recently  one 
or  two  English  socialists  have  visited  Australia, 
and  Mr.  Tom  Mann  has  been  employed  as  a 
salaried  organiser  by  the  Melbourne  Trades 
Hall.  But  the  policy  of  the  labour  party  is 
shaped  by  home  conditions.  There  is  little 
social  idealism  among  the  rank  and  file  of  the 
working  classes.  They  are  mostly  seeking 
immediate  and  concrete  results,  and,  so  far  as 
any  directive  purpose  on  their  part  is  con- 
cerned, it  is  merely  an  accident  that  the  policy 
thus  determined  trends  toward  socialism. 

Nevertheless  the  full  significance  of  the  la- 
bour programme  is  hardly  to  be  gathered  from 
its  formal  statement.  The  ideals  behind  it,  and 
the  spirit  in  which  laws  embodying  its  demands 
would  be  administered  by  a  labour  party  in 
power,  are  of  more  practical  interest  to  the 
people  of  Australia  than  are  the  bare  projects 
of  these  laws  themselves.  Labour  leaders  are 


1 20       The  Labour  Programme 

fully  conscious  of  their  socialist  purpose.  They 
are  perfectly  candid  in  stating  it  to  their  sup- 
porters. They  do  not  look  upon  their  present 
legislative  demands  as  final.  They  intend 
gradually  to  carry  the  principles  these  imply  to 
their  logical  conclusion,  and  they  would  admin- 
ister the  government  so  as  to  further  this  end. 
As  they  are  practical  politicians  and  have  felt 
the  responsibility  of  office,  they  are  more 
conservative  in  their  immediate  proposals  and 
party  tactics.  No  red  flag  demonstrations, 
occur  at  their  meetings.  They  are  confessedly 
leaving  much  of  their  ultimate  programme  to 
their  children  and  grandchildren.  But  they 
know  where  the  road  they  are  travelling  leads, 
and  are  advertising  their  destination  to  the  peo- 
ple. They  are  endeavouring,  gradually  and 
without  violently  disturbing  existing  conditions, 
to  abolish  private  employment,  and  thereby,  as 
they  think,  solve  the  economic  problem  of 
society.  Few  of  them  are  communists.  Most 
of  them  are  sceptical  as  to  the  possibility  of 
establishing  economic  equality.  It  is  hardly 
necessary  to  say  that  none  of  them  looks 


The  Labour  Programme        121 

forward  to  making  a  grand  division  of  the 
country's  wealth  among  all  the  citizens.  But 
they  have  faith  that  the  State  can  in  some  way 
make  it  possible  for  every  man  to  earn  a 
"living  wage."  It  is  toward  this  end  that  they 
are  experimentally  proceeding. 


CHAPTER  VI 
A  WHITE  AUSTRALIA 

A  WHITE  AUSTRALIA  retains  the  first  place  in 
the  labour  platform,  although  laws  for  attain- 
ing that  object  have  been  enacted,  and  this  de- 
claration of  policy  affects  chiefly  the  adminis- 
tration of  existing  statutes.  New  Zealand,  for 
historical  and  climatic  reasons,  is  less  concerned 
in  this  question  than  is  Australia.  The  terri- 
tory of  the  Commonwealth  is  almost  an  append- 
age of  Asia,  and  is  set  down  in  the  vicinity  of 
a  host  of  petty  insular  associates,  the  Polyne- 
sian groups,  and  of  the  densely  populated  East 
Indies.  It  is  embraced  in  an  imperial  connec- 
tion with  the  coolie  multitudes  of  British  India. 
And  it  possesses  large  tracts  of  strictly  tropi- 
cal country,  with  the  hot,  humid  climate,  the 
rank  vegetation,  the  diseases  and  drawbacks, 
and  with  the  special  agricultural  capabilities  of 
the  torrid  zone.  The  question  therefore  falls 

123 


A  White  Australia  123 

naturally  into  three  divisions :  Chinese  exclusion, 
intro-imperial  exclusion — which  are  both  essen- 
tially Commonwealth  questions — and  planta- 
tion labour  exclusion,  which  at  present  affects 
chiefly  and  directly  certain  industries  of 
Queensland,  but  in  the  course  of  future 
development  will  become  important  in  the 
northern  territory  of  South  and  Western 
Australia. 

The  Chinese  began  to  arrive  in  Australia  in 
numbers  sufficient  to  attract  attention  at  the 
time  of  the  gold  excitement,  fifty  years  ago. 
An  act  was  passed  in  Victoria,  in  1854,  restrict- 
ing their  immigration,  followed  shortly  by  sim- 
ilar laws  in  the  other  colonies.  Notwithstand- 
ing these  legal  discouragements,  the  Chinese 
soon  constituted  eleven  per  cent,  of  the  adult 
male  population  of  Victoria  and  New  South 
Wales,  then,  as  now,  the  most  populous  and  im- 
portant part  of  Australia.  The  opposition  to 
them  was  so  strong,  especially  after  the  placer 
diggings  began  to  show  signs  of  exhaustion, 
and  miners  were  forced  into  other  occupations, 
that  in  1861  serious  rioting,  requiring  the  inter- 


1 24  A  White  Australia 

vention  of  military  authority,  occurred  in  New 
South  Wales.  More  stringent  exclusion  laws 
were  subsequently  passed,  and  the  Chinese  were 
placed  under  special  disabilities,  preventing 
their  acquiring  citizenship,  owning  land,  or  en- 
gaging in  mining  occupations.  The  colonial 
immigration  laws  have  recently  been  superseded 
by  a  federal  act,  which  excludes  from  the  Com- 
monwealth, with  a  few  unimportant  exceptions, 
all  persons  unable  to  write  from  dictation  and 
sign  a  passage  of  fifty  words  in  a  European 
language. 

Though  the  Chinese  form  a  more  important 
fraction  of  the  population  in  northern  Queens- 
land, the  economic  evils  of  their  competition 
have  been  most  evident  in  Melbourne  and  Syd- 
ney. In  the  former  country  they  constitute  a 
phase  of  the  all-important  plantation  labour 
question.  Among  urban  workmen  they  are  an 
element  apart,  competing  in  retail  trade  and 
manufacturing,  especially  furniture  making, 
where  they  depress  wages  and  defy  industrial 
regulation.  This  competition  impresses  work- 
men with  their  need  of  government  protection, 


A  White  Australia  125 

and  with  the  racial  limitations  of  socialism. 
The  Chinese  are  social  rebels.  They  persistently 
evade  the  measures  devised  by  other  workers  to 
better  the  condition  of  labour.  Though  skil- 
ful at  co-operation  among  themselves,  they  do 
not  grasp  the  governmental  ideal.  They  pos- 
sess the  communal  instinct  which  precedes  mod- 
ern industrialism,  and  which  is  sometimes  con- 
founded with  the  so-called  scientific  socialism  of 
to-day.  The  very  capacity  for  acting  to- 
gether, which  they  have  in  as  high  a  degree 
as  the  best-disciplined  unionists,  is  used  to  evade 
government  regulations.  The  laws  of  Aus- 
tralasia generally  make  every  place  where  a 
Chinaman  is  employed  a  factory,  so  that  state 
supervision  is  extended  to  all  industrial  work- 
ers of  that  nationality ;  but  this  has  little  effect 
in  changing  their  customs.  Therefore  acts  to 
help  white  workmen,  by  shortening  hours  of  la- 
bour, raising  wages,  and  requiring  more  expen- 
sive sanitation  and  better  surroundings,  only 
enable  the  Chinese  to  compete  to  greater  advan- 
tage. Hence  it  becomes  a  very  important  mat- 
ter with  the  labour  party,  which  advocates  state 


i  26  A  White  Australia 

regulation  of  industry,  to  eliminate  from  their 
problem  this  factor  of  cheap  and  largely  un- 
controllable labour. 

A  few  Japanese  have  immigrated  to  Austra- 
lia, but  they  are  not  numerous  enough  to  affect 
the  labour  situation.  They  are  chiefly  em- 
ployed in  the  pearl  fisheries  of  the  northern 
coast.  The  trade  between  the  Commonwealth 
and  Japan  is  growing,  and  regular  lines  of  co- 
lonial and  Japanese  steamers  ply  between  Syd- 
ney and  Kobe  or  Yokohama.  Some  people  in 
Australia  anticipate  that  the  policy  of  restrict- 
ing the  immigration  of  Asiatics  may  in  time 
occasion  diplomatic  difficulties  with  their  north- 
ern neighbour. 

The  immigration  of  coloured  British  subjects 
from  India  has  not  been  large,  and  the  effect  of 
their  presence  in  Australia  is  hardly  sufficient  to 
justify  the  concern  of  white  workers.  But  the 
government  enforces  intro-imperial  exclusion, 
keeping  fellow-subjects  out  of  the  country  re- 
gardless of  allegiance  to  a  common  sovereign. 
The  federal  authorities  recently  refused  to  sign 
a  mail  contract  with  a  British  steamship  line 


A  White  Australia  127 

which  employed  coloured  citizens  of  the  Empire 
as  firemen. 

The  problem  of  developing  its  tropical  terri- 
tories with  white  labour  is  a  matter  of  national 
concern  for  Australia,  not  only  because  it  ulti- 
mately will  involve  the  direct  interests  of  the 
three  states  whose  resources  lie  largely  in  the 
torrid  zone,  but  also  because  the  federal  govern- 
ment must  bear  the  expense  which  this  policy 
imposes.  At  present  the  only  one  phase  of  the 
question  of  practical  importance  is  the  economic 
effect  of  excluding  colored  labour  upon  the  pro- 
duction of  sugar  in  northern  Queensland.  This 
industry  has  been  in  existence  for  more  than 
forty  years,  though  until  recently  the  amount 
of  cane  raised  hardly  exceeded  the  crop  of  a  sin- 
gle plantation  of  first  rank  in  Hawaii  or  Cuba. 
The  policy  of  erecting  central  mills  with  gov- 
ernment aid  was  started  about  twenty  years 
ago,  and  in  1893  the  Queensland  parliament 
passed  a  sugar  works  guarantee  act  which  per- 
mitted any  group  of  farmers  to  form  them- 
selves into  a  company,  and,  by  mortgaging 
their  lands  to  the  government,  obtain  capital 


128  A  White  Australia 

to  erect  a  mill.  Under  this  act  the  state  has 
become  involved  in  the  sugar  business  to  the 
extent  of  $2,800,000,  some  $300,000  of  which 
is  overdue  interest  and  redemption  instalments. 
Therefore  the  people  of  Queensland  are  con- 
cerned in  the  welfare  of  this  industry  to  the 
amount  of  about  six  dollars  per  capita,  irre- 
spective of  the  planters  and  small  landhold- 
ers, whose  entire  capital  is  engaged  in  cane 
raising. 

This  crop  has  been  cultivated  and  harvested 
by  imported  labourers  from  the  Pacific  islands, 
known  locally  as  "Kanakas."  These  contract 
workmen  were  first  introduced  about  the  time  of 
the  civil  war  in  America,  when  cotton  planting 
flourished  temporarily  on  account  of  the  block- 
ade of  our  southern  ports.  The  local  demand 
for  sugar  caused  cane  to  take  the  place  of  cot- 
ton when  the  price  of  the  latter  fell  at  the  close 
of  the  war.  Serious  abuses  grew  up  in  the 
method  of  recruiting  this  labour.  The  unwill- 
ing and  unsophisticated  islanders  were  enticed 
from  their  homes,  separated  from  their  families, 
and  in  some  instances  wantonly  killed  when  they 


A  White  Australia  129 

resisted  involuntary  service  in  a  strange  coun- 
try. The  evils  of  the  slave  trade  were  so  far 
revived  that  the  imperial  government  passed  an 
act,  in  1872,  "For  the  Prevention  and  Punish- 
ment of  Criminal  Outrages  upon  Natives  of  the 
Islands  of  the  Pacific  Ocean."  Various  at- 
tempts were  subsequently  made  by  Queensland 
to  regulate  and  mitigate  the  evils  of  this  traf- 
fic, and  at  one  time  it  was  temporarily  sus- 
pended. But,  up  to  the  present,  Kanakas  have 
outnumbered  all  other  workers  employed  in  the 
canefields,  though  they  are  relatively  less  im- 
portant now  than  in  the  early  days  of  the  in- 
dustry. During  the  fourteen  years  prior  to 
1900  sugar  production  increased  one  hundred 
and  twenty-one  per  cent.,  while  the  Pacific  Is- 
landers decreased  eighteen  per  cent.  About 
one-fifth  of  the  cane  raised  in  Queensland  is 
produced  by  white  labour  alone,  and  there  is 
one  white  planter  for  every  two  coloured  per- 
sons employed  in  the  industry. 

The  imported  labourers  were  closely  confined 
to  cane  cultivation,  partly  because  their  serv- 
ice was  worth  more  in  that  occupation,  and 


130  A  White  Australia 

partly  because  the  laws  of  the  colony  forbade 
their  engaging  in  other  kinds  of  employment. 
The  demand  for  coloured  labour  is  not  at  pres- 
ent exigent  except  in  tropical  agriculture. 
The  state  of  Queensland  extends  twelve  hun- 
dred miles  from  south  to  north,  with  corre- 
sponding variations  of  climate.  All  the  coun- 
try likely  to  require  coloured  labour  lies  within 
a  few  miles  of  the  coast.  Beyond  these  lowlands 
begin  immediately  a  range  of  highlands,  verg- 
ing off  into  the  central  plain, with  a  dry  climate, 
cool  nights,  and  other  natural  conditions  not 
so  unfavourable  to  Europeans.  The  coast 
lands,  however,  which  alone  are  adapted  to  agri- 
culture, are  extremely  humid,  and  their  mean 
temperature  varies  from  seventy-two  to  seventy- 
five  degrees,  and  the  maximum  reaches  one  hun- 
dred. Frost  never  occurs  in  the  northern  dis- 
tricts. All  of  the  physical  conditions  of  the 
country  are  unfavourable  to  white  men.  Sta- 
tistics from  the  plantations  show  that  the  wages 
of  white  workers  rise  and  the  number  of  days 
they  can  work  in  a  year  decreases  as  the  north- 
ern limit  of  this  coast  area  is  approached, 


A  White  Australia  1 3 1 

while  the  reverse  occurs  in  case  of  the  coloured 
labourer. 

The  Commonwealth  government,  yielding  to 
the  demand  of  the  labour  party  and  of  a  large 
independent  element  opposed  to  contract  labour 
on  principle,  has  abolished  Kanaka  importation. 
To  remedy  the  adverse  effect  of  this  action  upon 
the  sugar  industry,  a  tariff  of  nearly  thirty 
dollars  a  ton,  or  almost  as  high  as  that  in  the 
United  States,  has  been  levied  upon  imported 
sugar.  The  protective  effect  of  this  duty  is 
cut  in  half  by  an  excise  tax  of  about  fifteen 
dollars  on  home-grown  sugar.  But  in  order 
to  encourage  cane  raising  without  coloured 
help,  an  indirect  bounty  of  nearly  ten  dollars  a 
ton  is  paid  upon  sugar  grown  exclusively  by 
white  labour. 

Australia  is,  therefore,  following  a  policy 
that  ignores  to  some  extent  natural  and  eco- 
nomic laws.  The  government  would  redeem  a 
virgin  and  tropical  wilderness  by  Saxon  labour, 
and  domicile  within  the  torrid  zone  a  race  of 
workers  whose  physiological  adjustments  from 
remote  antiquity  have  fitted  them  for  colder 


132  A  White  Australia 

climates.  Not  even  when  the  Aryan  invaders 
descended  the  valley  of  the  Indus  and  estab- 
lished a  caste  supremacy  in  India,  was  this  at- 
tempted; for  subjugated  races  formed  the  raw 
levies  of  industry  in  the  subdued  land.  In  Aus- 
tralia there  is  no  indigenous  race  to  clear  the 
forests  and  till  the  soil.  For  these  tasks  the 
native  blacks  are  too  few  and  too  little  apt  at 
rude  or  protracted  labour.  The  term  White 
Australia  is  to  be  taken  literally,  and  means 
that  all  the  territory  of  the  Federation, 
except  possibly  New  Guinea,  is  to  be  re- 
served for  the  exclusive  occupancy  of  peo- 
ple of  British  stock.  No  such  vast  ex- 
periment at  acclimatisation  has  ever  been 
attempted.  Its  success,  if  doubtful,  can- 
not be  disproved,  because  it  is  so  novel.  And 
Australians  are  not  making  an  aggressive  ef- 
fort to  bring  into  use  the  natural  resources  of 
their  tropical  empire.  They  seem  content  to 
wait — if  necessary  forever — rather  than  seek 
another  solution  for  the  problem  than  the  one 
they  have  adopted.  A  labour  minister  in 
Queensland  said:  "We  believe  northern  Queens- 


OF    *  / 

^^SisSES*^^ 
A  White  Australia  133 

land  can  be  developed  by  white  labour  alone; 
but  if  we  knew  it  could  not,  we  should  prefer  to 
let  it  lie  idle  rather  than  to  saddle  the  country 
with  a  black  race  and  a  contract-labour  ques- 
tion." 

Climatic  causes  alone  do  not  give  the  coloured 
races  command  of  the  tropics.  Broadly  speak- 
ing, a  man  goes  with  his  natural  environment,  it 
is  true,  and  the  coloured  labourer  is  favoured  by 
his  better  adaptation  to  a  hot  climate.  Still 
the  question  is  open,  whether  it  is  not  primarily 
economic  competition,  in  the  industrial  sense, 
that  at  present  keeps  white  workers  away  from 
the  tropics.  The  progress  of  science  and  in- 
vention applied  to  plantation  industries,  and  a 
more  rapid  physiological  adaptation  to  climate 
than  is  now  anticipated,  may  reverse  the  posi- 
tion of  the  two  races  even  in  hot  countries,  turn- 
ing the  balance  of  adaptation  in  favour  of  the 
worker  with  superior  mental  equipment.  But 
Australia  must  meet  the  facts  that  tropical  in- 
dustries are  at  present  conducted  by  processes 
requiring  cheap  labour,  and  that  world-wide 
competition,  from  which  no  country  can  escape, 


1 34  A  White  Australia 

has  fixed  the  wage  of  the  labourer  in  the  tor- 
rid zone  far  below  that  required  by  Caucasian 
workers.  The  fringe  of  continent  which  the 
Commonwealth  possesses,  bending  far  north  to- 
ward the  equator,  still  awaits  the  pioneer.  As 
its  capacities  are  tested  and  its  resources  adver- 
tised, the  demand  for  its  development  will  be- 
come more  insistent.  Australians  may  be  will- 
ing to  pay  high  prices  for  tropical  produce  to 
enable  their  fellow  countrymen  to  labour  in  its 
fetid  swamps  and  on  its  broiling  plains ;  but  the 
market  the  few  million  residents  of  the  Com- 
monwealth afford  is  limited.  The  growing  de- 
mand that  the  modern  world  makes  on  the  ma- 
terial resources  of  the  globe  is  so  exigent,  that 
no  nation  can  lock  up  in  perpetual  reserve 
large  tracts  of  productive  territory.  To  neg- 
lect material  resources  is  to  forfeit  them.  Not, 
perhaps,  through  foreign  pressure,  but  from 
the  cogency  of  its  own  internal  needs,  the  Com- 
monwealth will  be  forced  to  use  its  entire  do- 
main. In  doing  this  the  tropical  labour  ques- 
tion will  continue  a  leading  issue.  No  single 
statute  will  retire  it  permanently  from  discus- 


A  White  Australia  135 

sion.  A  White  Australia  may  for  many  years 
stand  at  the  head  of  the  labour  platform,  not 
altogether  as  a  symbol  of  a  conquest  won,  but 
as  a  national  ideal.  It  may  in  time  become  a 
secure  attainment,  but  that  will  be  in  response 
to  changing  conditions  that  will  modify  the 
whole  process  of  tropical  production. 

The  attitude  of  the  labour  party  toward 
coloured  races  marks  the  limit  self-interest  im- 
poses on  the  altruistic  side  of  socialism.  The 
working  classes  are  seeking  to  realise  a  state  of 
society  where  all  members  are  qualified  and  ac- 
customed to  participate  in  industrial  as  well  as 
political  control.  This  can  be  attained  only  by 
a  process  of  striving  which  the  tropical  races 
have  not  yet  begun.  Therefore  labour  sympa- 
thy extends  only  to  those  who  are  consciously 
seeking  popular  ideals,  or  are  at  least  restless 
with  the  spirit  of  reform.  Discontent  is  the 
badge  of  brotherhood.  The  passive  hosts  of 
the  Orient  are  natural  enemies  of  socialism. 
They  represent  an  impending  economic  peril 
to  white  workers.  The  labour  movement  is  un- 
der one  aspect  a  vast  cosmopolitanising  influ- 


136  A  White  Australia 

ence.  It  discourages  the  spirit  of  nationality. 
Military  armaments  and  warlike  ideals  are  rec- 
ognised as  impeding  the  progress  of  labour. 
The  common  interests  of  a  class  are  more  im- 
portant than  the  separate  interests  of  different 
governments.  But  where  the  class  ends  the 
bond  is  broken.  A  nation  without  a  labour 
movement  is,  in  the  eyes  of  workingmen,  a  social 
outlaw,  without  the  seed  of  regeneration.  As 
the  Christians  of  the  Middle  Ages  called  every 
man  brother,  and  slaughtered  the  heathen  and 
the  heretic,  so  modern  socialists  extend  one  hand 
in  fellowship  to  class-conscious  labour,  and  with 
the  other  draw  the  sword  of  hostile  legislation 
against  the  toiler  unprotesting  against  his  lot. 
We  can  only  conjecture  what  part  the  multi- 
tudes of  the  Orient  are  to  play  in  coming  in- 
dustrial changes.  They  may  become  servants 
of  machinery  devised  and  controlled  by  Euro- 
peans, developing  the  species  of  intelligence  re- 
quired by  modern  industry  while  retaining  the 
docility  of  a  servile  race.  They  may  be  stim- 
ulated by  concrete  examples  of  scientific  attain- 
ment to  a  new  era  of  progress.  They  may 


A  White  Australia  137 

remain  in  mental  stagnation,  passing  away  like 
a  lower  organism  before  a  race  whose  relative 
advantage  in  the  world's  competition  is  multi- 
plied by  every  new  discovery,  and  whose  grow- 
ing dominance  is  extended  by  that  very  process 
of  self-perfection  of  which  the  labour  movement 
is  a  part.  Whichever  of  these  possibilities  is 
realised,  or  if  all  are  realised  in  different  de- 
grees, Australia  believes  itself  more  concerned 
than  any  other  continent  in  the  event. 


CHAPTER  VII 
MINIMUM  WAGE  BOARDS 

VICTORIA  received  more  immigrants  at  the 
time  of  the  gold  excitement  than  the  developed 
resources  of  the  country  could  profitably  em- 
ploy. Therefore  manufactures  sprang  up  at 
Melbourne,  under  favouring  legislation,  to  oc- 
cupy this  surplus  labour,  and  a  permanent 
population  of  skilled  workers  was  created. 
Factories  extended  faster  than  the  market 
accessible  to  Australian  manufacturers,  and 
overproduction  followed,  with  the  result  that 
the  excess  of  workmen  found  no  demand  for 
their  services  at  home,  and  no  place  within 
reaching  distance  to  offer  them.  Consequently 
industrial  crises  occurred  in  which  sweating  and 
other  evils  affecting  especially  the  working 
classes  arose.  Chinese  competition  added  to  the 
distress  of  white  employees  in  some  trades. 
These  conditions  finally  aroused  public  atten- 
138 


Minimum  Wage  Boards        139 

tion.  Government  investigations  followed, 
which  showed  the  unfavourable  situation  of  the 
working  people  to  be  dependent  on  what  were 
thought  remediable  industrial  conditions,  and 
modifications  of  the  factory  laws  were  under- 
taken to  correct  them. 

The  problems  presented  by  sweating  and 
Chinese  competition  were  so  complex  and  re- 
quired so  much  detailed  regulation  that  the 
direct  intervention  of  parliament  was  likely  to 
prove  cumbersome  and  ineffective.  Therefore 
authority  to  deal  with  these  questions  was  dele- 
gated to  subordinate  bodies,  called  minimum 
wage  boards,  representing  the  trades  affected, 
and  composed  of  men  having  practical  knowl- 
edge of  the  industry  under  their  jurisdiction. 
The  authority  thus  delegated  was  specified  and 
limited  by  the  Factories  Act.  It  covered  more 
ground  than  the  general  law  that  had  preceded 
it,  partly  because  the  problems  to  be  met  were 
different,  and  partly  because  more  powers  could 
be  entrusted  to  a  body  of  specialists  dealing 
continuously  with  an  industry  and  free  to  revise 
their  acts,  than  could  be  safely  granted  to  an 


140       Minimum  Wage  Boards 

administrative  official,  or  even  exercised  direct- 
ly by  parliament  itself  through  the  hard  and 
fast  provisions  of  a  statute. 

The  authority  of  the  legislature  in  the  Brit- 
ish colonies  is  not  limited  by  a  written  constitu- 
tion. Therefore  it  can  delegate  powers  copious 
enough  to  supply  any  necessary  degree  of 
authority  to  the  secondary  agency  chosen  to 
administer  them.  The  wage  boards  might 
legally  have  been  empowered  to  take  entire 
control  of  private  industry.  However,  their 
functions  do  not  exceed  in  principle  those  ex- 
ercised by  railway  commissions  in  America 
— with  the  important  reservation  that  they  af- 
fect private,  as  well  as  public  and  quasi-public 
industries.  The  Victorian  parliament  did  not 
regulate  the  price  of  the  products  or  services  of 
a  business,  but  it  gave  the  boards  authority  to 
prescribe  a  minimum  wage  for  employees  in 
certain  classes  of  establishments.  This  au- 
thority was  granted  in  order  to  remedy  a 
special  evil — a  wage  so  low  that  it  threatened 
the  common  interest  of  society  in  maintaining  a 
standard  of  living  among  all  classes  sufficient 


Minimum  Wage  Boards       141 

for  healthy  social  progress.  One  motive  was 
to  protect  society  from  the  competition  of  a 
lower  civilisation — that  of  the  Chinese.  The 
law  was  directed  against  sweating  on  the  theory 
that  this  abuse  is  unprofitable  for  all  concerned 
in  it.  The  average  profits  of  manufacturers  are 
no  higher  when  sweating  is  rampant  than  when 
a  fair  wage  is  paid;  and  the  volume  of  their 
trade  is  lessened  by  the  lower  consuming  power 
of  workers.  Propertied  interests  were  not  op- 
posed to  a  statutory  minimum  wage  on  the 
ground  that  it  was  an  attack  upon  capital. 
The  better  employers  rather  courted  some  pro- 
vision that  freed  them  from  the  competition  of 
less  scrupulous  men  of  their  own  class.  More- 
over, though  the  determinations  of  wage  boards 
are  legislative  acts,  in  essence  amendments  to 
the  factory  law,  they  preserve  in  some  degree 
the  form  of  a  voluntary  agreement.  The  boards 
who  pass  them  are  composed  of  an  equal  num- 
ber of  delegates  from  the  employers  and  em- 
ployees in  the  trade  in  question,  under  a  non- 
partisan  chairman,  and  their  decisions  are 
frequently  compromises,  formally  not  unlike 


142        Minimum  Wage  Boards 

collective  bargains  made  between  trade  unions 
and  employers.  But  the  members  are  paid  for 
their  services  from  the  public  revenues,  and 
parliament  decides  what  trades  shall  be  subject 
to  the  Act. 

Victoria,  therefore,  did  not  intend  radically 
to  extend  state  regulation  of  industry  in  this 
effort  to  remedy  evils  recognised  as  of  legiti- 
mate public  concern.  Similar  measures  might 
be  adopted  anywhere  in  the  United  States  with- 
out exciting  comment  as  a  bold  departure  from 
our  precedents  and  institutions.  The  labour 
people  favoured  but  did  not  initiate  the  law. 
The  amendment  was  not  embodied  in  the  factory 
law  as  an  entering  wedge  to  socialism.  Its 
ulterior  possibilities  were  not  suspected,  because 
its  immediate  purpose  was  so  evident.  But  in 
the  midst  of  the  general  movement  towards 
state  regulation  of  industry,  this  legislation  has 
been  diverted  toward  a  development  sympa- 
thetic with  that  occurring  in  neighbouring 
states  and  colonies.  It  has  been  moulded  by 
the  changing  popular  ideals,  by  expanding  con- 
ceptions of  the  State's  functions  in  industrial 


Minimum  Wage  Boards       143 

matters,  and  by  the  persistent  pressure 
of  labour  interests  in  its  administration, 
until — despite  hostile  amendments  recently 
enacted — it  accords  in  spirit  and  purpose 
with  other  advanced  legislation  in  Austra- 
lasia. 

The  power  of  the  boards  is  limited  by  statute 
to  determining  two  principal  matters,  the  mini- 
mum wage  and  apprenticeship.  By  implication 
authority  to  fix  wages  involves  the  right  to  fix 
overtime  rates,  and  so  gives  the  boards,  as  is 
further  provided  in  the  act,  power  to  determine 
the  length  of  the  working  day.  Boards  may 
establish  rates  of  wages  for  both  time  and  piece- 
work, or  fix  time  wages  and  allow  manufactur- 
ers to  adjust  the  rates  they  pay  by  the  piece  to 
this  standard.  In  order  to  curtail  child  labour, 
the  boards  are  authorised  to  regulate  the  pay 
of  apprentices,  and  the  number  of  unindentured 
apprentices  employed  in  proportion  to  journey- 
men. Formerly  they  could  limit  the  number  of 
apprentices,  whether  indentured  or  not;  but  a 
recent  amendment,  caused  partly  by  a  scarcity 
of  skilled  operatives  since  the  expansion  of 


144        Minimum  Wage  Boards 

manufactures  following  federation,  takes  away 
the  right  to  restrict  the  employment  of  inden- 
tured learners. 

Boards  cannot  prohibit  strikes,  and  so  are 
under  no  obligation  to  satisfy  all  the  demands 
of  labour,  because  workingmen  are  free  to  resort 
to  other  measures  for  securing  more  pay  than 
the  determinations  grant.  Therefore  they  dif- 
fer from  an  arbitration  court,  which  being 
instituted  to  prevent  strikes  is  the  sole  legal 
recourse  of  workers  seeking  to  better  them- 
selves with  the  growing  prosperity  of  their 
employers,  and  consequently  ought  to  have  full 
authority  to  adjust  wages  to  the  demands  of 
labour  crises  as  well  as  to  industrial  crises. 
However,  the  boards  would  have  fulfilled  their 
original  intent  had  they  merely  enforced  a 
living  wage.  This  would  have  corrected  sweat- 
ing, and  might  have  checked  the  pressure  of 
Chinese  competition.  To  enact  a  statutory 
wage  higher  than  this  purpose  demands,  was  to 
exceed  their  original  object  and  assume  powers 
not  contemplated  by  the  legislature.  But  the 
analogy  of  a  collective  bargain  seems  to  have 


Minimum  Wage  Boards       145 

guided  the  representatives  upon  these  bodies,  so 
that  they  unconsciously  interpreted  their  duty 
as  not  unlike  that  of  an  arbitration  court. 
Therefore,  a  standard  or  union  wage  was 
usually  made  the  minimum.  In  fact  some  of 
the  determinations  fixed  the  minimum  higher 
than  the  average  wage  previously  prevailing. 
In  1897,  the  year  after  the  boards  were  estab- 
lished, protests  against  this  were  presented  to 
parliament  by  the  boot  and  clothing  manufac- 
turers. To  prevent  such  a  compulsory  increase 
of  wages,  an  amendment  was  passed  in  1904, 
defining  the  procedure  by  which  boards  are  to 
determine  what  is  a  minimum  wage.  They  are 
required  to  ascertain  as  a  question  of  fact  the 
average  wage  paid  by  reputable  employers, 
and  are  forbidden  to  fix  a  minimum  higher 
than  the  average  wage  as  thus  determined. 
The  boards  are  also  allowed  to  fix  special 
rates  of  pay  for  aged,  infirm,  or  slow 
workers. 

Although  the  late  amendments  are  thought 
reactionary  by  labour  sympathisers,  they  tend 
to  assimilate  wage-board  laws  to  arbitration 


146        Minimum  Wage  Boards 

laws.  A  necessary  result  of  defining  the  pro- 
cedure to  be  used  in  ascertaining  a  minimum 
wage,  is  to  clothe  the  boards  with  such  quasi- 
judicial  powers  as  authority  to  receive  evidence 
under  oath.  Much  more  important  is  a  new 
provision  establishing  a  court  of  industrial  ap- 
peals, consisting  of  a  justice  of  the  state 
supreme  court,  with  two  assessors  appointed  by 
the  court  from  nominees  by  the  employers  and 
employees  respectively.  These  assessors  are 
technical  advisers,  rather  than  members  of  the 
court.  This  tribunal  is  authorised  to  hear 
appeals  from  the  decision  of  any  board,  and  to 
amend  the  whole  or  part  of  the  board's  deter- 
mination. The  court  is  not  limited  to  specified 
procedure  in  ascertaining  what  shall  be  a  min- 
imum wage,  though  its  jurisdiction  does  not 
otherwise  extend  beyond  the  subjects  of  which 
the  boards  may  take  cognisance.  The  first 
appeal  to  this  court  was  made  by  a  body  of 
employers. 

The  determinations  of  the  boards  are  en- 
forced by  ordinary  tribunals,  like  parliamen- 
tary statutes,  usually  upon  action  brought  by 


Minimum  Wage  Boards       147 

the  factory  inspector.  Trade  unions  are  not 
recognised  in  the  constitution  of  the  boards  or 
the  enforcement  of  their  decisions.  Therefore, 
the  merits  and  demerits  of  unionism  do  not  enter 
into  the  controversy  respecting  them,  and  the 
law  has  not  aroused  the  same  class  sentiment  as 
the  arbitration  acts.  Employers  have  applied 
for  eleven  of  the  thirty-eight  boards  estab- 
lished. 

Testimony  as  to  the  influence  of  the  boards 
upon  sweating  and  Chinese  competition  varies. 
Both  continue  to  exist  in  Melbourne.  I  have 
seen  large  bundles  of  clothing  going  out  of  fac- 
tories, to  be  made  up  by  contractors  who  were 
evading  board  determinations.  In  1904  a  dele- 
gation of  workingmen  petitioned  the  ministers 
to  take  measures  to  prevent  Chinamen  from 
absorbing  the  furniture  trade  in  Melbourne. 
The  number  of  Chinese  cabinetmakers  employed 
in  that  city,  at  the  minimum  journeyman's 
wage  or  over,  the  previous  year,  was  four  hun- 
dred and  six,  earning  on  an  average,  $12.32  a 
week ;  while  the  white  workers  in  the  same  trade 
numbered  four  hundred  and  seventy,  and  earned 


148        Minimum  Wage  Boards 

on  an  average  $15.84  a  week.  But  the  wages 
reported  by  Chinese  employers  are  not  reliable. 
Therefore  the  law  has  not  eradicated  the 
evils  it  was  devised  to  meet,  but  nevertheless  it 
appears  to  have  mitigated  them.  Few,  if  any, 
strikes  have  occurred  where  wage  determinations 
are  in  force.  The  workers  themselves,  who 
ought  to  be  the  best  judges,  commend  the  effect 
of  the  act. 

Comparing  the  condition  of  workers  under 
the  boards,  and  those  not  subject  to  board  ju- 
risdiction, the  wages  of  all  female  workers  and  of 
all  adult  male  workers  are  higher  in  the  regu- 
lated trades ;  but  the  wages  of  boys  and  youths 
are  higher  in  occupations  free  from  govern- 
ment control.  This  is  probably  because  the 
determinations  of  the  wage  boards  contain  pro- 
visions discouraging  the  employment  of  juvenile 
labour,  and  therefore  boys  engaged  in  regulated 
trades  are  fewer  and  are  employed  in  relatively 
unimportant  operations  as  learners,  while  in  the 
unregulated  trades  boys  do  men's  work,  and  are 
paid  more  in  consequence.  But  if  the  wages 
of  all  male  workers  in  regulated  and  unregu- 


Minimum  Wage  Boards       149 

lated  trades  are  compared,  the  average  pay  of 
those  working  under  board  determinations  is 
$1.14  a  week  more  than  that  of  their  fellows 
in  other  occupations. 

The  Victorian  law  has  recently  been  modified 
with  a  view  to  overcoming  a  difficulty  experi- 
enced in  dealing  with  slow  workers.  Formerly 
less  efficient  operatives  were  obliged  to  prove 
age  or  infirmity,  or  some  similar  specific  dis- 
ability, in  order  to  secure  permits  to  work  for 
a  wage  lower  than  that  prescribed  by  the  board. 
A  late  amendment  to  the  act  dispenses  with 
this  requirement,  so  that  now  the  mere  fact  that 
a  man  is  not  able  to  earn  the  minimum  wage  in 
the  opinion  of  employers  qualifies  him  to  a  per- 
mit from  the  inspectors.  To  prevent  the  abuse 
of  this  provision,  the  law  limits  the  number  of 
slow  workers  in  any  one  establishment  to  not 
more  than  one-fifth  of  the  workers  paid  the  full 
legal  wage. 

The  regulation  of  wages  by  statute  is  the 
essentially  new  thing  in  the  Victorian  legisla- 
tion. The  nominal  control  of  apprenticeship  is 
only  a  comprehensive  child  labour  enactment. 


150       Minimum  Wage  Boards 

It  is  granted  to  the  boards,  like  the  right  to 
specify  the  hours  of  labour,  because  the  age  of 
workers  affects  average  wages.  But  the  theory 
of  state  jurisdiction  behind  the  law  exceeds 
that  of  ordinary  factory  acts.  The  govern- 
ment assumes  the  responsibility  of  enforcing  a 
living  wage.  The  state  of  Victoria  is  under- 
taking this  new  function  gradually,  extending 
its  control  from  industry  to  industry,  but  there 
has  been  no  retreat  from  this  principle.  It  is 
more  clearly  defined,  because  less  confused  by 
other  issues,  in  minimum  wage  than  in  arbitra- 
tion legislation.  For  instance,  such  a  theory  is 
nowhere  expressed  in  the  New  Zealand  arbitra- 
tion law,  and  it  has  been  applied  through  the 
growth  of  judicial  interpretation,  rather  than 
by  direct  enactment.  But  in  the  Victorian  law, 
as  recently  amended,  a  board  not  able  to  fix  a 
minimum  wage,  under  the  restrictions  placed  on 
its  procedure,  high  enough  to  guarantee  an 
adequate  income  to  the  worker,  is  required  to 
refer  the  matter  to  the  court  of  industrial  ap- 
peals, which  is  empowered  to  take  freer  action, 
so  as — "to  secure  a  living  wage  to  the  employ- 


Minimum  Wage  Boards       151 

ees  in  such  trade  or  industry  who  are  affected 
by  such  determination." 

This  principle,  not  as  yet  followed  out  to 
its  full  implications,  is  a  guiding  idea  with  the 
labour  party.  The  responsibility  of  the  State 
for  a  living  wage,  logically  leads  to  the  respon- 
sibility of  the  State  for  employment  at  that 
wage.  If  these  two  functions  of  government 
are  generally  recognised  as  moral  duties,  and 
are  realised  in  political  action,  the  result  is 
state  socialism. 

For  this  reason  the  wage  regulation  of 
Australasia  is  not  to  be  confounded  too  closely 
with  the  regulation  of  wages  and  industry  in 
the  Middle  Ages,  or  even  more  recently  in 
England  and  colonial  America.  The  earlier 
statutes  were  class  legislation  in  the  interest  of 
property.  The  laws  just  described  are  class 
legislation  in  the  interest  of  labour.  The  for- 
mer were  overthrown  by  the  democratic  move- 
ment. The  second  are  an  outcome  of  the 
democratic  movement  carried  over  into  indus- 
try. The  economic  effects  of  such  laws  may 
prove  to  be  the  same  in  both  instances.  But 


152        Minimum  Wage  Boards 

the  force  behind  them  is  different.  It  has  not 
been  shown — nor  can  it  be  shown  except  by 
experience — that  the  difference  in  origin  and 
motive  may  not  radically  modify  the  adminis- 
tration and  the  economic  influence  of  regulative 
legislation.  Nearly  every  group  of  social  phe- 
nomena has  recurrent  aspects.  In  the  history 
of  mankind,  the  pendulum  of  political  control 
has  swung  from  autocracy  to  democracy  and 
back  again  several  times.  Religion,  art,  litera- 
ture, almost  every  division  of  culture  and 
mental  activity,  show  similar  repetitions.  But 
while  broadly  similar,  each  recurring  complex 
of  conditions  is  not  identical  with  its  predeces- 
sor. This  may  be  true  of  industrial  organisa- 
tion. The  modern  state  and  the  ancient  and 
mediaeval  state  are  not  alike.  The  people  that 
constitute  society  are  not  the  same  people.  The 
material  bases  of  industrial  life  are  vastly  dif- 
ferent. To  reason  from  the  experience  of  the 
past  to  the  possibilities  of  the  future,  omitting 
all  these  varying  conditions,  is  to  court  error. 
There  may  be  general  economic  laws  that  apply 
in  both  instances.  They  may  be  sufficiently 


Minimum  Wage  Boards       153 

important  to  predestine  the  experimental  legis- 
lation of  Australasia  to  failure.  But  broader 
knowledge  and  profounder  study  than  have  yet 
been  devoted  to  this  subject  are  required  to  give 
us  conclusions  of  value. 


CHAPTER  VIII 
INDUSTRIAL  ARBITRATION  ACTS 

NEW  ZEALAND  was  the  first  of  the  colonies  to 
pass  a  compulsory  arbitration  law;  but  the 
movement  behind  this  legislation  started  in 
Australia.  Like  the  labour  party,  its  origin 
dates  from  the  maritime  strike  of  1890.  Prior 
to  that,  boards  for  the  voluntary  conciliation  of 
industrial  disputes  had  been  formed  in  one  or 
two  colonies,  and  bills  had  been  introduced  in 
parliament  for  conciliation  councils,  like  the 
conseils  de  prud'hommes  of  France;  but  these 
efforts  were  not  successful.  No  organisation 
and  no  familiar  procedure  existed  for  dealing 
with  such  an  emergency  as  the  strike  just  men- 
tioned, and  immediately  after  the  conclusion  of 
that  struggle  this  want  manifested  itself  in  a 
number  of  projects,  put  forth  privately  and 
publicly,  for  settling  disputes  between  work- 


Industrial  Arbitration  Acts      155 

men  and  employers.  Among  these  was  a  bill 
proposed,  in  1890,  by  the  Right  Honourable 
Charles  Kingston,  the  premier  of  South  Aus- 
tralia, for  the  encouragement  of  the  formation 
of  industrial  unions  and  the  settlement  of  in- 
dustrial disputes,  which  is  the  parent  of  all  the 
arbitration  laws  now  in  operation  in  Australasia. 
This  bill  was  not  enacted  until  1894,  on  account 
of  the  strong  opposition  of  the  conservatives  in 
the  upper  house  of  parliament,  and  was  so 
amended  that  when  it  did  become  a  law  it  pos- 
sessed formal  defects  that  made  its  provisions 
inoperative. 

During  the  four  years  that  the  South  Aus- 
tralian bill  was  under  discussion,  some  form  of 
conciliation  or  arbitration  legislation  was  at- 
tempted in  every  colony  except  Tasmania  and 
Western  Australia.  The  legislation  in  New 
South  Wales  was  preceded  by  an  exhaustive 
investigation  of  measures  for  strike  prevention 
in  other  countries,  the  results  of  which  were  em- 
bodied in  a  voluminous  report — a  document 
drawn  upon  by  all  who  made  a  study  of  this  sub- 
ject in  Australasia  during  this  period.  The 


156     Industrial  Arbitration  Acts 

mother  colony  passed  an  arbitration  law,  in 
1892,  almost  identical  with  Mr.  Kingston's 
project  and  the  later  New  Zealand  act,  except 
that  it  had  no  compulsory  features.  This  law 
proved  a  failure,  despite  the  energetic  efforts 
of  the  officers  of  the  court  to  make  it  a  success. 
While  it  was  in  force  a  single  strike  occurred 
costing  the  colony  half  a  million  dollars.  No 
effort  was  made  to  retain  the  law  when  the  four 
years  for  which  it  had  been  enacted  expired. 
The  failure  of  this  act  was  a  severe  blow  to  the 
principle  of  voluntary  arbitration,  and  had 
more  effect  upon  popular  opinion  because  of  its 
close  resemblance  in  other  respects  to  the  com- 
pulsory laws. 

In  1892  a  bill  embodying  many  of  the  clauses 
and  most  of  the  essential  features  of  the  pro- 
posed South  Australian  act  was  introduced  into 
the  New  Zealand  parliament  by  the  minister  of 
labour,  the  Hon.  W.  P.  Reeves,  and  became  a 
law  in  1894,  after  protracted  opposition  from 
the  upper  house  of  parliament.  This  act  went 
into  practical  operation  in  1896,  and  has  been 
in  force  continuously  since.  In  1900  Western 


Industrial  Arbitration  Acts      157 

Australia  followed  New  Zealand  with  a  compul- 
sory arbitration  act.  The  original  law  was 
found  defective  in  many  details,  and  two  years 
later  was  superseded  by  a  revised  law,  which  is 
now  in  operation.  In  1900  New  South  Wales, 
which  had  been  without  official  machinery  for 
settling  labour  disputes  since  the  lapse  of  the 
voluntary  arbitration  law  four  years  before, 
sent  a  commissioner  to  investigate  the  working 
of  the  New  Zealand  act,  and  upon  his  report 
enacted  a  law  differing  in  several  formal  re- 
spects, and  containing  even  more  stringent  pro- 
visions for  the  prevention  of  strikes,  than  the 
statute  in  force  in  the  latter  colony.  Since  its 
passage,  in  1901,  this  law  has  been  in  operation, 
with  but  a  single  amendment.  In  December, 
1904,  a  federal  compulsory  arbitration  act  be- 
came law.  This  statute  applies  to  industrial 
disputes  extending  beyond  the  borders  of  a  sin- 
gle state.  In  order  to  meet  the  new  conditions 
imposed  by  a  jurisdiction  covering  a  territory 
nearly  as  large  as  the  United  States,  and  in- 
cluding co-ordinate  jurisdiction  with  state  in- 
dustrial authorities,  the  organic  portions  of  the 


158      Industrial  Arbitration  Acts 

act  contain  important  modifications  not  present 
in  the  state  and  colonial  statutes. 

The  policy  of  compulsory  arbitration  was 
thought  out  and  adopted  in  Australasia  by 
public  men  of  broad  popular  sympathies  rather 
than  by  labour  leaders.  The  people  still  re- 
ceived their  legislative  projects  from  parliamen- 
tary ministers,  rather  than  from  party  conven- 
tions. Therefore  popular  sentiment  followed 
rather  than  led  in  the  adoption  of  these  meas- 
ures. Evidence  given  before  a  commission  ap- 
pointed to  investigate  sweating  in  New  Zealand, 
in  1890,  and  before  the  New  South  Wales  strike 
commission,  the  same  year,  shows  that  a  few  la- 
bour leaders  and  social  theorists  had  thought  of 
the  possibility  of  a  state  tribunal  to  settle  in- 
dustrial disputes.  But  their  random  and  hesi- 
tating proposals  do  not  indicate  a  demand  for 
government  interference  in  strikes  definite  and 
general  enough  to  shape  legislation.  Public 
discussion  of  the  same  subject  in  the  United 
States  would  develop  views  of  the  same  kind, 
equally  advanced  in  principle  and  divergent  in 
detail,  and  equally  without  the  aggressive  qual- 


Industrial  Arbitration  Acts      159 

ity  that  makes  such  opinions  politically  effect- 
ive. The  author  of  the  New  Zealand  law, 
speaking  of  the  final  vote  upon  the  bill,  thus  de- 
scribes the  indifference  that  accompanied  its 
passage:  "Mildly  interested,  rather  amused, 
very  doubtful,  parliament  allowed  it  to  become 
a  law,  and  turned  to  more  engrossing  and  less 
visionary  measures." 

Whatever  the  condition  of  public  opinion 
when  the  first  of  these  acts  was  passed,  indif- 
ference is  the  last  word  one  would  now  use  in 
describing  the  attitude  of  the  people  towards 
them.  No  other  measures  discussed  by  parlia- 
ment awaken  more  general  interest,  or  have 
more  influence  in  determining  political  group- 
ings and  cabinet  crises. 

As  all  of  the  arbitration  laws  are  related  by 
close  ties  of  derivation,  the  machinery,  proced- 
ure, and  jurisdiction  that  they  create  are  sim- 
ilar. The  organic  sections  vary  in  essential 
detail — if  we  except  the  federal  law — only  so 
far  as  they  relate  to  provisions  made  for  con-, 
ciliation. 

The  structural  unit  of  the  law  is  the  indus- 


160     Industrial  Arbitration  Acts 

trial  union,  or  association  of  workers  or  of  em- 
ployers. These  organisations  are  purely  vol- 
untary, like  any  company  or  corporation,  but 
like  the  latter  they  must  observe  certain  formal- 
ities in  order  to  have  legal  existence;  and  they 
possess  specified  rights  and  responsibilities. 
They  alone  may  appear  as  parties  before  the 
court.  They  nominate  the  lay  representatives 
of  workers  and  employers  respectively  upon  that 
tribunal,  and  upon  the  boards  of  conciliation 
where  these  exist,  ^s  corporate  bodies  they 
possess  legal  jurisdiction  over,  and  claims 
against,  their  individual  members.  Any  trade 
union  or  organisation  of  employers,  or  asso- 
ciation of  such  bodies,  is  allowed  to  incorporate 
under  the  act  simply  by  registering  in  accord- 
ance with  its  provisions.  In  New  Zealand  a 
body  of  workers  not  formally  associated  as  a 
trade  union  may  register  as  an  industrial  union 
after  perfecting  the  simple  organisation  re- 
quired by  law.  While  only  unions  or  associa- 
tions can  bring  action  before  the  boards  or 
courts,  an  individual  employer  or  worker  may 
be  summoned  before  the  court  to  answer  for  a 


Industrial  Arbitration  Acts      161 

violation  of  the  act,  or  of  the  court's  orders, 
and  likewise  in  cases  where  such  an  organisa- 
tion is  obliged  to  enforce  discipline  upon  its 
members. 

New  Zealand  and  Western  Australia  have 
provided  boards  of  conciliation,  which  are  com- 
posed of  an  equal  number  of  representatives  of 
employers  and  employees,  under  an  impartial 
chairman.  Each  board  has  limited  jurisdiction 
over  a  single  one  of  the  districts  into  which  the 
colony  and  the  state  in  question  are  divided. 
Originally  a  case  had  to  be  brought  before  a 
conciliation  board  before  being  appealed  to  a 
court  of  arbitration,  unless  both  parties  were 
agreed  in  their  desire  to  lay  it  immediately  be- 
fore the  higher  tribunal.  But  later  amend- 
ments to  the  New  Zealand  law,  which  were 
adopted  in  the  present  Western  Australian  law, 
allow  either  party  to  carry  the  case  directly  to 
the  court.  As  a  result  conciliation  proceedings 
have  fallen  into  practical  abeyance. 

The  arbitration  court  consists,  except  under 
the  federal  act,  of  a  justice  of  the  supreme 
court  of  the  state  or  the  colony,  and  of  two  lay 


1 62      Industrial  Arbitration  Acts 

members,  one  of  whom  is  a  representative  of  the 
unions  of  employers,  and  the  other  of  the  unions 
of  workers.  A  recent  amendment  in  New  South 
Wales,  where  the  supreme  court  judges  refused 
to  serve  upon  the  court,  allows  a  lower  judge 
to  be  president  of  this  tribunal.  The  court  is  a 
court  of  record,  with  the  usual  powers  of  a 
civil  court  to  determine  its  own  procedure,  re- 
ceive evidence  under  oath,  maintain  order,  and 
is  in  other  ways  assimilated  to  the  regular  ju- 
dicial system;  but  it  stands  apart  from  this 
system  in  combining  legislative  with  both  civil 
and  criminal  judicial  powers,  and  in  being  in- 
dependent of  appeal  to  other  tribunals,  except 
on  questions  involving  the  interpretation  of  the 
act  of  parliament  creating  it.  A  case  cannot 
be  removed  from  the  industrial  arbitration 
court  to  any  other  court  by  certiorari  or  sim- 
ilar proceedings. 

Under  the  law  a  registrar  is  provided,  who 
records  decisions  and  proceedings  of  the  court, 
incorporates  industrial  unions,  and  acts  as  gen- 
eral administrative  officer  for  the  court.  Where 
conciliation  boards  exist,  a  clerk  of  awards  in 


Industrial  Arbitration  Acts      163 

each  district  performs  duties  similar  to  those  of 
a  registrar.  To  become  legally  binding  indus- 
trial agreements,  or  collective  bargains  between 
employers  and  workers,  must  be  recorded  with 
the  same  officers.  Provision  is  made  for  special 
boards  of  conciliation,  and  for  expert  assess- 
ors to  act  as  advisers  of  the  court  in  technical 
cases. 

The  federal  law  contains  several  new  features, 
devised  partly  to  meet  difficulties  that  have 
appeared  in  the  administration  of  the  state 
laws,  and  partly  to  adapt  the  machinery  of  ar- 
bitration to  the  wider  territorial  sphere  and  the 
different  political  units  under  its  jurisdiction. 
As  in  New  South  Wales,  the  cumbersome  and 
nearly  useless  boards  of  conciliation  are  dis- 
pensed with,  and  a  single  tribunal  is  consti- 
tuted for  the  Commonwealth.  The  new  law  de- 
parts from  all  its  predecessors  in  providing  that 
the  court  shall  consist  of  a  single  judge,  with- 
out lay  members  representing  the  unions  of  em- 
ployers and  employees.  The  arbitration  judge 
must  be  a  member  of  the  federal  supreme  court, 
but  he  may  appoint  as  his  deputy,  to  exercise 


164     Industrial  Arbitration  Acts 

the  functions  of  the  federal  court  during  the 
latter's  pleasure,  any  justice  of  a  state  supreme 
court.  The  court  may  refer  questions  in  dis- 
pute to  a  conciliation  committee  consisting  of  an 
equal  number  of  employers  and  employees,  or  to 
a  trial  board,  which  maybe  a  state  industrial  au- 
thority— for  instance,  a  state  arbitration  court 
or  wage  board — or  may  be  a  special  body,  con- 
sisting of  an  equal  number  of  representatives  of 
employers  and  employees,  and  a  chairman  who 
must  be  a  judge  of  one  of  the  higher  courts  of 
the  state.  The  decisions  of  all  these  subor- 
dinate bodies  become  binding  only  as  orders  of 
the  federal  court.  Exceeding  the  jurisdiction 
of  a  state  court  in  this  respect,  the  federal 
judge  may  take  cognisance  of  a  dispute,  in  the 
public  interest,  of  his  own  volition,  without 
awaiting  an  appeal  from  either  of  the  parties. 
Procedure  before  conciliation  boards  was 
originally  expected  to  be  more  informal  than 
before  a  court,  but  in  practice  proceedings  be- 
fore both  bodies  follow  equally  judicial  methods. 
The  boards  may  summon  witnesses,  administer 
oaths,  receive  evidence,  and  preserve  order,  the 


Industrial  Arbitration  Acts      165 

same  as  the  court;  but  they  cannot,  like  the 
higher  body,  examine  the  books  of  employers  in 
camera.  Both  boards  and  courts  may  inspect, 
in  person  or  by  agents,  industrial  establish- 
ments affected  by  a  dispute,  and  interrogate 
employees.  In  New  Zealand  and  Western  Aus- 
tralia lawyers  cannot  appear  for  either  party 
unless  both  parties  consent.  They  may  appear 
in  the  New  South  Wales  and  federal  courts,  but 
the  judge  is  forbidden  to  assess  their  fees  as 
costs.  The  court's  decisions  cannot  be  at- 
tacked on  technical  grounds;  and  the  judge  is 
not  bound  by  rules  of  evidence,  but  may  inform 
himself  regarding  points  at  issue  in  any  way  he 
thinks  just. 

The  conciliation  boards  formed  under  the 
earlier  laws  represent  a  stage  in  the  evolution 
of  public  opinion  from  voluntary  to  compulsory 
arbitration.  Their  theory  makes  the  decisions 
of  the  board  depend  on  the  formal  or  tacit  con- 
sent of  both  parties.  The  board's  recommenda- 
tion is  formally  accepted  when  the  disputants 
make  it  part  of  an  industrial  agreement, 
which  is  enforced  by  the  court  like  an  award. 


1 66      Industrial  Arbitration  Acts 

It  is  tacitly  accepted  when  they  allow  it  to  lie, 
without  appeal  to  the  court,  for  thirty  days  af- 
ter being  recorded  by  the  board,  and  thus  to 
acquire  the  force  of  an  award.  But  the  later 
law,  in  New  South  Wales,  omits  every  provision 
for  conciliation,  and  the  recent  federal  act 
simply  borrows  from  the  dormant  South  Aus- 
tralian law  a  clause  requiring  the  judge  to  rec- 
oncile the  parties  to  a  dispute,  if  possible,  be- 
fore allowing  it  to  come  to  trial. 

However,  at  a  conference  of  employers  and 
employees  at  Sydney,  in  May,  1906,  to  propose 
amendments  to  the  arbitration  law  in  New 
South  Wales,  a  project  found  favour  for  estab- 
lishing conciliation  boards  in  each  trade,  like  the 
minimum-wage  boards  of  Victoria,  to  consider 
and,  if  possible,  settle  disputes  before  referring 
them  to  a  court.  Such  representative  bodies, 
composed  of  employers  and  workmen  in  the 
trade  in  question,  would  have  a  better  technical 
knowledge  of  the  case  than  either  the  court  or 
the  older  conciliation  boards,  which  are  usually 
composed  of  men  having  no  practical  familiar- 
ity with  the  business  they  regulate,  and  as  law- 


Industrial  Arbitration  Acts      167 

yers  would  be  excluded,  proceedings  would  be 
cheaper.  The  latter  argument  appeals  to  la- 
bour unions,  whose  court  expenses  sometimes 
reach  $3,000  a  year. 

The  powers  of  a  court  of  arbitration  exceed 
those  of  conciliation  boards.  Its  decisions  are 
binding  on  the  parties  for  a  specified  time — usu- 
ally three  years — without  their  acceptance. 
The  court  can  amend  an  award  after  due  hear- 
ing, to  remedy  defects  or  to  give  fuller  effect  to 
its  provisions,  without  the  consent  of  the  par- 
ties, while  in  case  of  an  industrial  agreement 
or  a  board  recommendation,  which  represent 
a  contractual  relation,  the  consent  of  all  parties 
is  necessary  to  modify  the  terms  of  the  instru- 
ment. The  court  may  extend  an  award  to 
parties  not  appearing  in  the  original  dispute; 
that  is,  the  judge  can,  at  his  discretion,  make 
the  orders  of  the  court  a  common  rule  applying 
to  part  or  to  the  whole  of  an  industry.  Con- 
versely the  court  can  limit  the  application  of  an 
award  to  any  district,  as  to  an  urban  or  rural 
community,  or  to  any  employer  or  union.  The 
court  also  defines  what  shall  constitute  a  breach 


1 68      Industrial  Arbitration  Acts 

of  an  award,  and  fixes  penalties  for  breaches. 
In  New  Zealand  the  court  may  try  cases  and  im- 
pose fines  for  violating  the  penal  provisions  of 
the  act  prohibiting  strikes.  The  other  laws 
make  strikes  and  lock-outs  indictable,  and  the 
arbitration  judge,  therefore,  grants  leave  to 
prosecute  these  offences  in  the  criminal  courts. 
The  boundaries  of  an  arbitration  court's  ju- 
risdiction in  industrial  matters  are  defined  by 
the  act  creating  it ;  but  in  practice  they  depend 
largely  upon  the  body  of  precedent  contained 
in  existing  awards.  The  decisions  handed  down 
by  higher  courts  and  by  the  supreme  court  of 
the  Commonwealth,  upon  appeals  questioning 
the  powers  of  the  arbitration  courts  under  the 
constitution  and  the  acts  of  parliament  estab- 
lishing them,  also  define  their  jurisdiction.  Their 
powers  are  limited  by  the  industries  and  the 
classes  of  workers  made  subject  to  the  acts,  and 
by  the  degree  of  control  within  each  industry 
granted  to  the  court.  The  two  spheres  of  au- 
thority may  be  termed  respectively  the  exten- 
sive and  the  intensive  jurisdiction  conferred  by 
the  law. 


Industrial  Arbitration  Acts      169 

The  keyword  describing  the  scope  of  an  arbi- 
tration court's  extensive  jurisdiction  is  either 
"worker"  or  "industry,"  according  as  the  one 
or  the  other  of  these  terms  is  fundamental  in  the 
definitions  forming  the  interpretative  clauses  of 
the  act.  A  decision  of  the  arbitration  court  of 
New  Zealand,  disclaiming  jurisdiction  in  dis- 
putes brought  by  grocer's  clerks,  street  railway 
employees,  and  similar  workers,  on  the  ground 
that  their  occupations  were  not  properly  indus- 
tries, occasioned  an  amendment,  passed  in  1901, 
defining  worker  to  mean  any  person  doing 
skilled  or  unskilled  manual  or  clerical  work  for 
hire  or  reward.  This  makes  the  jurisdiction 
of  the  court  unlimited,  so  far  as  private  employ- 
ment is  concerned.  The  original  act  in  West- 
ern Australia  defined  worker  so  as  to  exclude 
clerical  labour,  apprentices,  and  persons  work- 
ing under  monthly  contracts ;  but  the  law  sub- 
stituted in  1902  extended  this  definition  so  as  to 
bring  all  classes  of  service  under  the  control  of 
the  court.  The  law  in  New  South  Wales  makes 
government  railway  servants  and  other  public 
employees  subject  to  the  supervision  of  the 


170     Industrial  Arbitration  Acts 

court,  but  domestic  servants  are  expressly  ex- 
cluded from  its  control.  The  federal  law,  by 
its  definition  of  industry,  excepts  from  the 
court's  jurisdiction  domestic  servants  and  per- 
sons engaged  in  farming  occupations. 

The  intensive  jurisdiction  of  the  court — 
using  the  term  to  mean  the  degree  to  which  it 
may  enter  into  the  detailed  regulation  of  a  busi- 
ness— is  determined  to  a  far  greater  extent  by 
the  rulings  and  precedents  of  former  decisions 
than  is  the  question  of  the  industries  and  indi- 
viduals to  which  the  awards  may  apply.  The 
general  intent  of  the  law  is  to  give  the  court 
power  to  settle  every  point  that  might  cause  a 
strike  or  lock-out.  All  matters  included  in 
collective  bargains  in  the  United  States  are 
proper  subjects  for  the  court's  consideration. 
But  the  impossibility  of  defining  these  in  detail 
has  occasioned  controversy,  relating  not  only 
to  the  declared  powers  given  the  court  by  act 
of  parliament,  but  also  to  the  definition  of  these 
powers  as  derived  from  their  formal  statement. 

Authority  to  fix  wages  is  a  recognised  element 
of  jurisdiction,  and  carries  with  it  the  right  to 


Industrial  Arbitration  Acts      171 

fix  rates  for  overtime,  and  indirectly  as  well  as 
directly  to  determine  the  hours  of  a  working 
day  and  to  establish  holidays.  The  courts  as 
a  rule  construe  this  power  liberally,  so  as  to  in- 
clude the  right  to  prescribe  a  fair  or  standard, 
and  not  merely  a  living  wage.  The  equity  of 
this  interpretation  comes  from  the  purpose  of 
the  act  to  prevent  strikes,  implying  authority 
to  deal  with  all  the  issues  of  a  strike,  and  there- 
fore to  fix  wages  in  relation  to  profits  as  well 
as  to  the  cost  of  living.  Frequently  the  court 
raises  wages — that  is,  prescribes  a  minimum 
above  the  average  previously  prevailing.  The 
only  exception  to  this  practice  is  in  Western 
Australia,  where  both  wages  and  the  cost  of  liv- 
ing are  falling  with  the  waning  gold  excitement, 
and  the  court  has  adopted  the  practice  in  some 
cases  of  fixing  a  minimum  no  higher  than  the 
probable  earning  power  of  the  poorest  employee. 
This  construction  of  its  authority,  borrowed 
from  wage  board  rather  than  arbitration  court 
reasoning,  proves  impossible  in  application,  as 
was  shown  when  several  thousand  lumbermen 
struck  successfully  to  raise  wages,  in  defiance 


172      Industrial  Arbitration  Acts 

of  the  court's  order.  No  democratic  country 
can  make  a  strike  penal  without  providing  legal 
recourse  for  obtaining  the  ends  of  a  strike  when 
justifiable. 

The  law  provides  that  the  court  may  set  a 
rate  of  pay  lower  than  the  minimum  for  slow 
and  infirm  workers.  The  regulation  of  piece- 
work and  contract  payments  is  under  the  con- 
trol of  the  court;  but  the  judge  in  Western 
Australia  has  refused  to  exercise  control  over 
agreements  made  by  workingmen  for  payment 
by  the  job. 

The  courts  have  authority  to  regulate  ap- 
prenticeship and  the  proportion  of  juvenile  and 
female  labour  employed  in  relation  to  adult  male 
labour.  This  is  also  a  power  which,  on  grounds 
of  expediency,  the  court  in  Western  Australia 
has  refused  to  exercise. 

The  chief  point  in  dispute  regarding  the  in- 
tensive jurisdiction  of  arbitration  courts  relates 
to  preference  of  employment  to  unionists,  a 
point  not  foreseen  when  the  New  Zealand  law 
went  into  operation.  The  question  is  nomi- 
nally, but  not  really,  the  same  as  the  closed  shop 


Industrial  Arbitration  Acts      173 

controversy  in  America.  An  industrial  union 
and  a  trade  union  are  different  organisations  in 
several  important  respects — and  chiefly  in  the 
different  degree  of  control  they  have  over  the 
admission  of  members.  An  industrial  union, 
under  the  arbitration  law,  exists  by  virtue  of  an 
act  of  parliament  and  is  fostered  by  the  policy 
of  that  act.  The  title  of  the  first  New  Zealand 
law,  which  was  borrowed  from  the  original 
South  Australian  bill,  stated  that  one  purpose 
of  the  act  was  to  encourage  the  formation  of 
industrial  unions.  Under  this  clause  of  the 
title  the  arbitration  court  of  that  colony,  sup- 
ported by  a  decision  upon  appeal  from  the  su- 
preme court,  in  some  of  its  awards,  granted 
preference  of  employment  to  members  of  unions. 
A  subsequent  amendment  to  this  law,  and  the 
original  statute  in  New  South  Wales,  expressly 
state  that  the  court  shall  have  power  to  give 
unionists  preference  of  employment,  though  this 
is  not  mandatory.  In  Western  Australia  a 
similar  clause  was  defeated  by  the  protracted 
opposition  of  the  upper  house  of  parliament. 
In  the  federal  law  the  power  is  granted  con- 


174      Industrial  Arbitration  Acts 

ditionally,  but  it  is  required  that  the  union  shall 
not  engage  in  political  activity  while  enjoying 
preference,  and  that  this  privilege  shall  be  given 
only  when,  in  the  opinion  of  the  court,  a  ma- 
jority of  the  workers  in  the  occupation  regu- 
lated by  the  award  approve  of  the  claim  for 
preference.  The  practice  of  the  court  in  New 
Zealand  has  established  its  right  not  only  to 
prescribe  that  unionists  shall  be  given  prefer- 
ence to  non-unionists  in  engaging  new  hands, 
but  that  non-unionist  workmen  already  em- 
ployed when  the  award  goes  into  operation  shall 
join  the  union  as  a  condition  of  retaining  their 
positions.  On  the  other  hand,  the  court  usu- 
ally provides  that  the  union  shall  have  prefer- 
ence only  so  long  as  it  admits  any  applicant  of 
good  character  to  membership,  without  ballot 
or  other  formality  likely  to  hamper  his  enrol- 
ment, upon  payment  of  moderate  fees  fixed  by 
the  court.  This  is  called  enforcing  the  closed 
shop  and  open  union.  The  economic  effect  of 
such  a  policy  is  not  important,  because  the 
range  of  choice  of  employers  in  choosing  men  is 
not  lessened  so  long  as  the  workmen  they  select 


Industrial  Arbitration  Acts      175 

can  obtain  admission  to  the  union.  From  the 
standpoint  of  members,  the  equity  of  the  demand 
that  employees  join  the  union  is  based  upon  the 
provisions  of  the  law  and  the  awards.  The 
stronger  organisations  had  enforced  the  closed 
shop  in  Australasia  before  the  court  was  estab- 
lished, and  refuse  to  relinquish  what  they  con- 
sider a  vested  right.  They  further  claim  the 
privilege  of  raising  the  issue  in  court,  because 
it  is  a  recognised  issue  in  strikes.  The  men  also 
assert  that  preference  is  just,  because  only 
unionists  incur  the  expense,  and  the  odium  with 
employers,  of  securing  awards,  and  are  liable 
to  penalties  for  breaking  the  awards.  Unless 
unionists  are  granted  legal  preference,  non- 
unionists  obtain  real  preference.  For  many 
employers  show  their  resentment  of  an  award 
by  discharging  members  of  the  organisation 
responsible  for  its  adoption. 

The  most  important  objection  to  granting 
preference  to  unionists  arises  from  the  organic 
connection  between  the  unions  and  the  political 
labour  party.  Preference  to  unionists  is  pref- 
erence of  employment  to  members  of  a  political 


176      Industrial  Arbitration  Acts 

organisation.  Under  the  secret  ballot  no  union 
can  force  a  man  to  vote  the  labour  ticket,  but  it 
can  coerce  members  by  effective  moral  duress  to 
give  financial  support  to  the  party  and  other- 
wise obey  its  dictates. 

The  percentage  of  workers  enrolled  in  unions 
increases  where  arbitration  laws  are  in  force, 
whether  or  not  preference  of  employment  is 
granted.  Over  one-third  of  the  persons  en- 
gaged in  mining  in  New  South  Wales,  and 
more  than  thirty  per  cent,  of  those  so  employed 
in  Western  Australia,  belong  to  unions  regis- 
tered under  the  arbitration  acts.  Still  the  pro- 
portion of  the  whole  population  in  such  unions 
hardly  exceeds  three  per  cent,  in  New  Zealand 
and  does  not  reach  seven  per  cent,  in  Western 
Australia.  Therefore  the  section  of  workers 
administering  and  directly  profiting  by  these 
laws  is  not  a  large  fraction  of  the  whole  people, 
and  of  itself  hardly  constitutes  a  dominant  po- 
litical force. 

For  the  sake  of  formal  equity,  though  the 
provision  has  no  practical  importance,  the  law 
authorises  the  court  to  order  that  members  of 


Industrial  Arbitration  Acts      177 

employers'  unions  shall  have  preference  of  serv- 
ice from  members  of  workers'  unions.  This 
feature  of  the  law  has  not  elicited  any  discus- 
sion or  public  interest. 

The  sections  of  the  arbitration  acts  defining 
the  powers  of  the  court  contain  a  "general  wel- 
fare" clause,  giving  authority  to  regulate  and 
enforce  any  established  custom  or  usage  of  an 
industry,  whether  general  or  local.  Where  this 
clause  is  construed  loosely,  as  in  New  Zealand 
and  New  South  Wales,  the  court  assumes  un- 
der it  very  broad  powers  of  industrial  regula- 
tion. The  following  sentence,  from  an  award 
in  the  former  colony,  indicates  that  the  right 
of  the  judge  to  prescribe  the  working  conditions 
of  an  industry  is  limited  only  by  his  own  dis- 
cretion: "This  court  is  not  justified  in  making 
a  radical  change  in  the  manner  in  which  em- 
ployers may  conduct  their  business,  unless  the 
party  desiring  that  change  proves  by  prepon- 
derating evidence  that  it  is  necessary  in  the  in- 
terests of  justice,  and  fair  and  equitable  to 
make  the  change."  The  chief  justice  of  New 
South  Wales,  in  giving  judgment  upon  an  ap- 


178      Industrial  Arbitration  Acts 

peal  case  involving  an  interpretation  of  the 
powers  of  the  arbitration  court,  said  of  the  act : 
"It  deprives  the  employer  of  the  conduct  of 
his  own  business,  and  vests  the  management  in 
the  tribunal  formed  under  the  act."  Under 
this  clause  the  court  has  considered  such  ques- 
tions as  the  speed  at  which  machines  are  to  be 
run,  the  number  of  men  to  be  employed  to  a 
machine,  and  whether  men  working  in  the  open 
air,  or  their  employer,  shall  decide  when  it  is 
too  wet  to  labour. 

The  intensive  jurisdiction  of  the  federal  ar- 
bitration court  is  about  the  same  as  that  of  the 
colonial  and  state  courts.  But  contention  has 
arisen  as  to  the  extent  of  its  control  over  indus- 
tries and  persons.  The  purpose  of  those  who 
inserted  in  the  federal  constitution  the  clause 
providing  for  compulsory  arbitration,  was  to 
meet  such  emergencies  as  the  maritime  strike, 
when  industrial  disputes  necessarily  extend  be- 
yond the  borders  of  a  single  state.  The  sea- 
men, and  possibly  the  shearers,  were  the  only 
organisations  likely  to  occasion  such  disputes. 
But  under  the  pressure  of  the  labour  party  the 


Industrial  Arbitration  Acts      179 

law  has  been  extended  to  cover  by  implication 
state  railway  employees.  This  is  a  bold  intru- 
sion on  state  rights,  as  an  order  of  the  federal 
court  raising  the  wages  of  railway  servants 
would  be  tantamount  to  an  order  to  the  state 
parliaments  to  provide  for  these  increased  wages 
in  their  budgets.  The  debate  upon  the  bill  de- 
veloped the  further  fact  that  many  labour 
members  contemplate  extending  almost  any  dis- 
pute across  state  lines  by  means  of  federal 
unions,  whenever  an  advantage  is  to  be  gained 
by  bringing  it  before  the  federal  author- 
ities. 

In  determining  the  minimum  wage,  the  arbi- 
tration court  may  take  into  consideration  three 
classes  of  evidence.  The  first  two  relate  to  the 
cost  and  standard  of  living,  and  to  the  custom- 
ary wage  paid  in  the  industry.  When  an 
award  is  under  litigation  both  sides  usually  pre- 
sent evidence  showing  prevailing  wages,  and 
workers  often  support  their  claims  by  testimony 
as  to  house  rent  and  the  cost  of  staple  household 
articles.  The  principle  of  a  living  wage  is 
therefore  fully  established  in  arbitration  pre- 


180     Industrial  Arbitration  Acts 

cedents.  The  judge  usually  follows  the  theory 
that  such  a  wage  is  a  first  charge  upon  an  in- 
dustry, to  be  imposed  if  the  business  is  to  con- 
tinue in  operation.  The  third  class  of  evidence 
relates  to  the  ability  of  employers  to  pay  a 
higher  wage,  irrespective  of  previous  rates  and 
the  necessary  expenses  of  workmen.  When  an 
award  is  under  consideration,  the  books  of  the 
firms  interested  are  often  inspected  by  the  judge 
in  camera,  and  dividends  and  other  evidence  of 
the  earning  power  of  a  business  are  admitted  as 
having  a  bearing  upon  an  equitable  wage  for 
employees.  The  court  thus  fixes  the  share  of 
the  profits  of  an  industry  which  the  worker  shall 
enjoy. 

This  last  assumption  of  State  authority  flows 
from  the  purpose  of  the  law,  and  is  not  directed 
toward  a  socialist  ideal,  in  the  same  way  that 
the  more  modest  authority  of  a  wage  determina- 
tion conforms  to  the  object  of  a  factories  act. 
One  is  to  prevent  strikes,  the  other  to  prevent 
sweating.  But  as  the  Victorian  law  has  com- 
mitted the  state  to  the  doctrine  that  the  gov- 
ernment should  enforce  the  right  of  workers  to 


Industrial  Arbitration  Acts      181 

a  legal  living  wage,  so  the  New  Zealand  law  and 
its  successors  commit  the  state  to  the  still 
broader  principle,  that  the  government  shall 
regulate  the  distribution  of  profits  from  private 
enterprises. 


CHAPTER  IX 

JURISTIC   ASPECTS    OF    COMPULSORY 
ARBITRATION 

ARBITRATION  acts  are  corporation  laws  en- 
forced by  equity  procedure.  The  court  deals  in 
first  instance  only  with  organised  workers  or 
employers.  Its  own  constitution  depends  upon 
the  existence  of  industrial  unions.  Corporation 
law  suggests  the  reciprocal  adjustment  of 
responsibilities  and  privileges  which  forms  the 
philosophical  basis  of  this  legislation.  The 
Right  Honourable  Charles  Kingston,  the  author 
of  the  parent  arbitration  law  of  Australasia, 
said — "Our  arbitration  laws  applied  to  labour 
are  company  law.  When  you  allow  capital  to 
organise,  it  is  subject  to  certain  State  require- 
ments, and  you  submit  the  incorporating 
individuals  to  special  legal  liabilities  and  re- 
strictions in  return  for  the  rights  you  give 
them ;  so  should  you  do  with  labour  if  you  allow 
182 


Aspects  of  Compulsory  Arbitration   1 8  3 

it  to  organise.  You  require  capital  to  incor- 
porate in  order  to  exercise  certain  capitalistic 
powers;  you  should  require  labour  to  incorpo- 
rate in  order  to  exercise  certain  collective  labour 
powers.  Every  argument  based  on  social 
grounds  that  you  can  advance  for  the  one,  is 
equally  applicable  to  the  other." 

The  theory  of  the  law  does  not  allow  one 
individual  to  interfere  with  the  business  of  an- 
other individual.  But  it  recognises  the  right 
of  the  employers  or  the  employees  of  an  indus- 
try as  a  class,  when  organised  to  exercise  their 
collective  will,  to  enforce  that  will  in  the  admin- 
istration of  the  industry  through  government 
agencies.  The  awards  are  a  definition  of  cor- 
porate rather  than  of  individual  rights.  A 
violation  of  an  award  is  prosecuted  against  a 
society  when  workers  are  defendants,  and  in 
behalf  of  a  society  when  they  are  plaintiffs. 
The  damages  suffered  by  either  party  through 
a  violation  of  an  award  are  damages  to  a 
corporation  in  the  first  instance,  and  are  re- 
coverable from  or  in  behalf  of  a  corporation. 
Single  employers  offending  against  an  award 


1 84  Aspects  of  Compulsory  Arbitration 

are  sometimes  sued  individually,  but  even  here 
the  ultimate  responsibility  rests  upon  the  union, 
which  has  legal  authority  to  discipline  its 
members.  In  original  proceedings,  to  secure 
awards,  employers  always  appear  as  organi- 
sations. 

The  true  functions  of  an  arbitration  court 
are  sometimes  clouded  by  the  forms  of  proced- 
ure and  the  nomenclature  of  the  acts.  The 
court  is  a  representative  rather  than  a  purely 
judicial  bodv.  It  does  not  possess  the  freedom 
from  bias  that  our  laws  require  of  a  petty  jury, 
but  rather  represents  a  balance  of  opposing 
interests  under  the  control  of  a  judicial  officer. 
This  representative  character  of  the  court  sug- 
gests that  it  is  a  legislative  as  well  as  a  judicial 
authority.  Its  decisions  and  orders  are  legisla- 
tive acts,  that  may  amend,  modify,  and  sup- 
plant existing  factory  laws  and  industrial 
legislation,  and  create  new  laws  governing 
industrial  relations.  It  fixes  holidays,  compen- 
sation for  accidents,  physical  conditions  of 
employment,  and  other  matters  already  forming 
items  of  legislation,  and  enforces  a  minimum 


Aspects  of  Compulsory  Arbitration    185 

wage  and  an  eight-hour  day,  which  it  has  been 
proposed  to  embody  in  parliamentary  enact- 
ments. The  higher  courts  of  New  South  Wales 
have  held  that  an  arbitration  court  can  amend 
existing  statutes  relating  to  workers  so  as  to 
improve  their  condition,  but  that  it  cannot 
repeal  the  provisions  of  such  statutes,  by  im- 
posing conditions  upon  labour  more  onerous 
than  those  permitted  by  parliament. 

The  union  of  legislative  and  judicial  author- 
ity in  the  same  body  is  unwise ;  for  the  court  is 
called  upon  not  only  to  interpret  its  own  laws, 
but  also  to  punish  violations  of  its  laws  that  de- 
pend upon  its  own  interpretation.  An  interpre- 
tation may  amount  virtually  to  an  amendment  of 
an  award.  This  not  only  leaves  to  the  discretion 
of  the  judge  the  prevention  of  evils  that  might 
better  be  avoided  by  a  different  distribution  of 
authority,  but  it  encourages  litigation.  The 
arbitration  courts  have  been  more  occupied  with 
enforcing  equitable  conditions  of  employment 
than  with  establishing  them.  Appeals  to  the 
court  are  encouraged,  because  a  prosecution  for 
a  breach  of  an  award  may  secure  an  amending 


1 86  Aspects  of  Compulsory  Arbitration 

interpretation  of  the  court's  previous  order, 
made  more  stringent  by  the  constructive  disre- 
gard of  his  authority  then  prominent  in  the 
mind  of  the  judicial  officer. 

The  legislative  function  of  the  court  accounts 
in  part  for  the  uncertain  position  it  holds  in 
public  opinion — possessing  neither  the  dignity 
of  a  judicial  tribunal  nor  the  frankly  popular 
character  of  a  parliamentary  body.  As  a  law- 
maker, the  court  is  the  mark  of  virulent  and 
partisan  criticism,  and  its  orders  are  subject 
to  the  same  public  comment  and  discussion  as 
other  legislative  or  administrative  acts,  while 
in  its  purely  judicial  capacity  it  receives  the 
respect  usually  shown  to  a  dispenser  of  justice. 
During  the  proceedings  in  an  important  mining 
case  in  Western  Australia,  while  an  award 
enacting  terms  of  employment  in  the  most 
important  industry  in  the  state  was  under  con- 
sideration, a  newspaper  commented  editorially 
upon  the  merits  of  the  issues  involved.  The 
paper  was  warned  that  it  rendered  itself  liable 
to  punishment,  under  a  clause  of  the  arbitration 
act  prohibiting  the  publication  of  anything 


Aspects  of  Compulsory  Arbitration    187 

likely  to  interfere  with  a  matter  before  the 
court.  The  freedom  of  the  press  is  thus 
curtailed  by  applying  to  legislative  body  pro- 
tective canons  of  law  devised  to  procure 
uninfluenced  and  unimpeded  channels  for  the  ad- 
ministration of  justice. 

However,  in  response  to  practical  considera- 
tions, arbitration  laws  are  evolving  toward  a 
separation  of  judicial  and  legislative  powers. 
Strikes  have  become  indictable  offences,  prose- 
cuted before  criminal  tribunals.  Breaches  of 
awards  are  prosecuted  under  an  action  of  mixed 
civil  and  criminal  character,  and  the  defendant, 
if  convicted,  is  adjudged  to  pay  costs,  and  an 
additional  sum  partaking  of  the  nature  both  of 
a  fine  and  of  an  award  of  damages.  Such  a 
"penalty"  is  made  payable  directly  to  the  plain- 
tiff, and  in  the  statute  the  defendant  is  defined 
as  a  judgment  debtor.  The  earlier  acts,  in  New 
Zealand  and  Western  Australia,  left  the  arbi- 
tration court  exclusive  jurisdiction  over  such 
offences,  much  as  an  American  court  punishes 
violations  of  its  own  injunctions.  The  New 
South  Wales  law  takes  a  step  towards  sepa- 


1 8  8  Aspects  of  Compulsory  Arbitration 

rating  judicial  and  legislative  functions,  by 
making  the  orders  of  the  arbitration  court  en- 
forceable by  a  court  of  petty  sessions,  with 
appeal  to  the  former  tribunal.  Action  is 
brought  under  the  Small  Debts  Recovery  Act. 
The  federal  law  recognises  a  more  purely 
punitive  element  in  these  penalties,  by  author- 
ising the  court  to  order  them  paid  into  the 
public  treasury,  instead  of  to  an  individual  or 
organisation — a  provision  which  employers  are 
now  trying  to  secure  in  New  South  Wales.  This 
law  also  provides  for  the  recovery  of  fines  for 
breaches  before  civil  magistrates. 

The  congestion  of  business  before  the  court 
is  a  potent  influence  forcing  the  transfer  of  its 
judicial  functions  to  other  tribunals.  In  New 
South  Wales  applications  for  awards  form  less 
than  ten  per  cent,  of  the  issues  considered  by 
the  court,  and  the  number  of  such  applications 
filed  but  still  unheard  rose  from  thirty-eight  to 
sixty-two  between  June,  1903,  and  April  of  the 
following  year.  A  similar  accumulation  of  busi- 
ness has  occurred  in  New  Zealand,  and  is  not 
entirely  absent  in  Western  Australia.  This 


Aspects  of  Compulsory  Arbitration    1 89 

would  be  remedied  if  the  court's  action  were 
confined  to  its  primary  object  of  determining 
conditions  of  employment,  leaving  its  orders  to 
be  enforced  by  regular  course  of  law. 

Arbitration  acts  derive  their  authority  from 
the  police  powers  of  government.  They  are 
measures  to  prevent  industrial  disorder,  which 
is  a  form  of  social  disorder,  and  their  main 
interest  lies  in  their  application  to  this  purpose. 
Each  new  enactment  contains  a  clearer  defini- 
tion of  this  object  and  more  direct  means  for 
attaining  it.  The  New  Zealand  law  prohibits 
a  strike  or  lock-out  only  when  one  of  the  parties 
to  the  dispute  appeals  to  the  court.  If  both 
parties  prefer  to  settle  their  difficulties  by  a 
strike,  the  law  permits  them  to  do  this.  The 
statutory  prohibition  of  strikes  and  lock-outs 
covers  only  actions  done  while  proceedings  re- 
lating to  the  dispute  are  pending,  and  for  a 
sufficient  time  beforehand  to  allow  either  party 
to  begin  proceedings  if  he  so  desires.  When 
giving  judgment,  the  court  may  define  in  the 
award  what  shall  constitute  a  violation  of  its 
provisions,  and  fix  a  penalty  for  such  violation. 


1 90  Aspects  of  Compulsory  Arbitration 

During  the  first  period  the  strike  or  lock-out  is 
prohibited  by  statute;  after  the  award  is  in 
force,  it  may  be  forbidden  by  the  court.  Nei- 
ther the  statute  nor  the  award  becomes  operative 
unless  invoked  by  one  of  the  parties  to  the  dis- 
pute. There  are  two  exceptions  to  this  rule. 
The  law  prohibits  strikes  and  lock-outs  among 
workers  and  employers  in  related  industries. 
Parliament  has  defined  all  building  trades  as 
related  industries.  The  court  may  extend  this 
provision  to  other  groups  of  employments.  Con- 
sequently, if  an  award  has  been  given  in  the 
bricklaying  trade,  for  instance,  the  mortar- 
mixers  or  the  hod  carriers  cannot  tie  up  that 
trade  by  a  strike,  although  unwilling  to  lay 
their  case  before  the  court. 

The  second  contingency  bringing  parties  in- 
voluntarily under  the  act  is  where  an  award  has 
been  given  in  their  industry  limited  to  some 
other  portion  of  the  colony.  The  employers  or 
workers  subject  to  the  award  might  be  injured 
in  such  instances  by  the  competition  of  employ- 
ers or  workers  in  the  districts  not  subject  to  its 
provisions.  If  so,  they  may  have  the  award 


Aspects  of  Compulsory  Arbitration   191 

extended  to  establishments  in  the  competing 
district.  The  purpose  of  this  extension  is  not 
to  prevent  strikes,  but  in  equalising  competition 
they  are  incidentally  prohibited. 

The  New  South  Wales  act,  passed  five  years 
after  the  New  Zealand  law  went  into  operation, 
unconditionally  prohibits  strikes  and  lock-outs 
prior  to  and  pending  the  consideration  of  the 
dispute  by  the  arbitration  court,  whether  the 
parties  apply  for  an  award  or  not,  and  makes 
such  disturbances  a  misdemeanour.  Although  as 
indictable  offences  these  crimes  are  tried  before 
criminal  courts,  leave  to  prosecute  must  first  be 
obtained  from  the  arbitration  judge.  There 
was  some  doubt  in  New  South  Wales  whether 
a  strike  retained  its  criminal  character  if  begun 
after  an  award  had  been  given.  The  court  can 
define  in  an  award  what  shall  constitute  a  viola- 
tion and  fix  a  penalty  therefor.  The  state 
attorney-general,  who  is  author  of  the  act, 
appears  to  have  thought  that  the  court  penalty 
superseded  the  statutory  penalty  in  this  case. 
But  when  a  body  of  coal  miners  working  under 
an  award  struck,  early  in  1904,  the  arbitration 


192  Aspects  of  Compulsory  Arbitration 

court  granted  authority  to  the  attorney-general 
to  prosecute  under  the  penal  provisions  of  the 
law,  thus  affirming  the  continued  criminality  of 
the  offence. 

The  latest  Western  Australian  and  the  new 
federal  act  prohibit  strikes  and  lock-outs  un- 
conditionally, without  regard  to  whether  they 
are  begun  prior  or  subsequent  to  giving  an 
award.  The  federal  law,  in  addition  to  a  fine 
of  nearly  five  thousand  dollars,  makes  a  person 
guilty  of  these  offences  ultimately  liable  to 
three  months'  imprisonment.  The  strike  pro- 
vision of  the  earlier  New  Zealand  law,  then,  is 
analogous  in  effect  to  an  injunction  pending 
proceedings,  while  in  the  Australian  laws  it 
becomes  a  penal  enactment. 

The  original  intent  of  the  law  was  to  enforce 
arbitration,  rather  than  unconditional  conti- 
nuity of  employment.  Those  who  projected  this 
legislation  appear  to  have  thought  that  the 
State  was  competent  to  prescribe  just  terms  of 
employment,  which  because  they  were  just  would 
be  accepted  voluntarily  by  those  for  whom  they 
were  intended.  But  the  development  of  this 


Aspects  of  Compulsory  Arbitration   1 9  3 

idea  is  toward  assuming  that  conditions  of  em- 
ployment prescribed  by  the  State  are  just,  and 
that  it  is  therefore  wrong  not  to  accept  them. 

The  increasing  stringency  of  the  law  is  tem- 
pered by  the  discretion  of  the  court.  In 
Western  Australia  the  judge  has  held  that  an 
employer  who  discharges  all  his  hands,  with 
the  purpose  of  engaging  an  entirely  new  force, 
is  not  guilty  of  a  lock-out.  The  court  in  New 
South  Wales  has  held  that  no  strike  has  been 
committed  when  a  body  of  men  terminate  service 
after  giving  the  fourteen  days'  notice  previously 
customary  in  their  occupation. 

Second  in  obvious  importance  only  to  strike 
prevention,  and  even  more  significant  in  ulterior 
effects  and  legal  implications,  is  the  relation  of 
compulsory  arbitration  to  the  right  of  private 
contract.  The  development  of  this  aspect  of 
the  law  has  been  parallel  with  that  described  in 
case  of  strikes.  New  Zealand  initiated  these 
acts  by  assuming  that  the  State  might  regulate 
the  collective  bargain  between  employers  and 
employees.  The  industrial  agreement,  which  is 
a  voluntary  instrument,  is  recognised  in  all 


194  Aspects  of  Compulsory  Arbitration 

arbitration  laws  as  the  desirable  form  of  set- 
tling terms  of  employment.  These  agreements 
are  enforced  by  the  court  the  same  as  its  own 
orders.  But  while  the  original  theory  of  the 
law  was  that  the  State  might  enforce  collective 
bargains,  the  practical  outcome  of  the  New 
Zealand  law  in  operation  was  that  the  State 
made  collective  bargains.  However,  in  that 
colony  the  government  steps  in  to  prescribe  the 
contract  of  service  only  when  invited  to  do  so 
by  one  of  the  interested  parties,  and  when  they 
fail  otherwise  to  agree.  The  court  does  not 
intrude  its  good  offices  upon  either  employers  or 
employees,  except  to  prevent  strikes  in  related 
industries  or  to  equalise  competition  in  adjacent 
districts.  But  when  brought  into  operation, 
the  action  of  the  court  is  in  every  instance  pos- 
itive and  mandatory.  Conditions  of  employ- 
ment already  existing,  while  recognised  as 
precedents  in  making  awards,  have  no  legal 
standing  prior  to  the  court's  declaration.  Not 
until  the  court  has  made  an  award  prescribing 
conditions  of  employment,  or  these  conditions 
have  been  registered  in  an  industrial  agreement, 


Aspects  of  Compulsory  Arbitration   195 

do  they  become  part  of  the  law  of  the  land.  The 
New  South  Wales  court,  in  its  first  decision, 
made  a  sweeping  extension  in  the  regulative 
principle  here  implied.  It  prohibited  any 
change  in  existing  conditions  of  employment, 
unless  by  the  agreement  of  both  parties  or  by 
its  own  orders.  In  other  words,  the  court 
undertook  to  enforce  every  existing  contract  of 
service,  whether  written,  oral,  or  implied,  just 
as  if  it  had  been  an  award.  It  was  held,  to 
quote  from  the  official  report  of  the  first  case 
heard,  that :  "The  right  of  freedom  of  contract 
has  been  considerably  modified  by  the  Industrial 
Arbitration  Act.  Though  parties  may  still 
make  voluntary  agreements,  existing  terms  and 
conditions  of  employment  cannot  be  disturbed 
at  the  will  of  one  party  alone."  The  New  Zea- 
land court,  then,  can  enforce  only  a  contract 
which  it  itself  has  made  or  approved;  the  New 
South  Wales  court  can  enforce  any  contract 
of  service  unconditionally,  and  its  jurisdiction 
extends  by  statute  to  all  workers  and  employers 
in  the  state,  whether  voluntarily  subject  to  the 
act  or  not. 


196  Aspects  of  Compulsory  Arbitration 

Compulsory  arbitration  also  impairs  the 
right  of  private  contract  under  another  aspect. 
An  equitable  award  must  apply  to  all  persons 
engaged  in  an  industry  subject  to  similar  con- 
ditions of  production  and  the  jurisdiction  of  the 
court.  Therefore  the  court  is  empowered  to 
make  its  orders  a  common  rule,  applying  to  all 
parties  coming  under  this  description.  The 
master  tailors  and  the  tailoresses  of  Auckland 
were  working  under  a  voluntary  agreement. 
Against  their  will,  and  with  both  workers  and 
employers  joined  as  defendants,  upon  the  ap- 
plication of  employers  and  employees  in  the 
southern  cities  of  the  colony,  the  arbitration 
court  substituted  for  this  agreement  an 
award  changing  conditions  of  employment. 
Wherever  compulsory  arbitration  is  in 
force,  the  court  finds  it  necessary  simi- 
larly to  annul  or  modify  existing  contracts 
of  service,  against  the  will  of  the  parties, 
though  these  contracts  are  not  in  themselves 
illegal. 

An  industrial  agreement  is  a  contract  ap- 
proved and  sanctioned  by  the  court,  and  might 


Aspects  of  Compulsory  Arbitration    1 97 

therefore  be  supposed  to  enjoy  special  immu- 
nity from  alteration.  In  Western  Australia  the 
court  has  held  that  it  cannot  modify  an  indus- 
trial agreement  without  the  consent  of  all  the 
signatory  parties.  But  elsewhere  the  court  has 
amended  these  contracts,  or  substituted  awards 
in  place  of  them. 

Upon  the  ground  that  the  relation  of  employ- 
er and  employee  must  exist  in  order  to  bring 
the  parties  under  the  jurisdiction  of  the  law, 
the  supreme  court  of  the  Commonwealth  has 
given  a  decision  on  appeal,  to  the  effect  that  the 
arbitration  court  cannot  regulate  contracts  for 
the  performance  of  a  specific  piece  of  work. 
This  principle  applied  where  a  number  of  la- 
bourers agreed  to  do  certain  work  as  co-contract- 
ors. This  decision  defeats  the  act  in  some 
cases,  and  to  meet  this  difficulty  legislation  has 
been  proposed  limiting  still  more  the  right  of 
private  contract. 

The  previous  considerations  apply  only  to  the 
contract  of  service.  But  the  contract  of  pur- 
chase and  sale  is  equally  dangerous  to  effective 
State  regulation  of  industry.  The  reason  for 


&   TH'E  ^"\ 

DIVERSITY) 
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198  Aspects  of  Compulsory  Arbitration 

this  is  that  a  service  may  be  embodied  in  a 
commodity,  and  transferred  as  an  element  or 
quality  of  a  material  object.  To  illustrate  con- 
cretely, an  arbitration  court  may  fix  a  day  rate 
to  be  paid  to  saddlers,  and  a  piece-work  rate 
for  every  operation  of  making  a  saddle ;  but 
its  jurisdiction  does  not  extend  to  regulating 
the  sale  of  the  leather,  saddle-tree,  and  other 
materials  out  of  which  a  saddle  is  manufac- 
tured, or  to  the  sale  of  a  completed  saddle. 
Therefore,  a  manufacturer  may  sell  these  ma- 
terials to  a  workman,  and  the  latter  may  sell 
the  finished  product  to  the  manufacturer  at  a 
higher  price  than  the  materials  cost,  but  at  a 
lower  price  than  the  cost  of  making  prescribed 
by  the  court  plus  the  cost  of  the  materials. 
Where  such  transactions  are  conducted  under  a 
system  of  weekly  or  monthly  credits,  the  differ- 
ence between  the  relation  thus  established  and 
ordinary  industrial  service  is  merely  nominal. 
Yet  technically  they  are  not  the  same.  In  the 
one  instance  work  is  sold,  in  the  other  commodi- 
ties. The  court  has  no  jurisdiction  over  the 
latter  contract. 


Aspects  of  Compulsory  Arbitration   1 99 

The  right  of  the  government  to  make  certain 
contracts  illegal  is  well  recognised.  A  working- 
man  cannot  lawfully  contract  out  from  the  ben- 
efits of  an  employers'  liability  act.  But  in  this 
case  the  interests  of  third  parties — of  the  fam- 
ily of  the  worker — are  directly  and  chiefly 
affected  by  the  action  of  the  employee.  The 
wife  and  children  suffer  if  the  husband  and 
father  has  no  recourse  for  injuries  incurred  in 
service.  The  same  logic  may  be  stretched  to 
cover  all  contracts  governing  wage  relations. 
They  all  affect  the  third  parties  forming  the 
worker's  family.  But  this  protection  is  not  the 
primary  purpose  of  these  latest  limitations 
upon  the  contractual  freedom  of  the  individual. 
Industrial  regulation  to  be  effective  must  be 
uniform.  It  must  establish  uniform  conditions 
of  production,  if  it  is  to  establish  uniform  con- 
ditions of  service.  But  private  contract,  wheth- 
er for  labour  or  for  commodities,  means  varia- 
tion of  wages  and  prices  beyond  the  control 
of  the  regulating  authority.  These  variations 
may  prevent  the  conditions  of  production  from 
becoming  uniform,  and  so  defeat  the  efforts  of 


2OO  Aspects  of  Compulsory  Arbitration 

the  court  to  enforce  equal  terms  of  employment 
throughout  an  industry.  Therefore  compulsory 
arbitration  and  private  contract  are  in  the 
widest  sense  contradictory.  Their  mutual  op- 
position continually  creates  new  problems  for 
legislators. 

Compulsory  preference  of  employment  to 
unionists  has  been  mentioned  in  its  historical 
relation  to  arbitration  laws.  This  subject  also 
presents  interesting  legal  aspects.  The  court 
prescribes  membership  in  an  organisation  as  a 
condition  of  obtaining  or  retaining  employ- 
ment. Equity  requires  the  court  to  exercise 
increasing  supervision  over  these  organisations, 
to  enforce  the  responsibilities  that  accompany 
their  privileges.  The  unions  are  no  longer  vol- 
untary associations.  The  worker,  because  he 
is  a  worker,  enters  into  a  new  social  relation. 
He  is  required  to  submit  to  quasi-public  regula- 
tion not  imposed  on  all  citizens.  His  privileges 
and  disabilities  are  those  of  a  class.  A  legal 
recognition  of  class  underlies  these  laws,  and 
they  revive  the  old  historical  struggle  between 
contract  and  status.  They  reverse  the  pro- 


Aspects  of  Compulsory  Arbitration    20 1 

cess  of  evolution  of  private  rights  in  European 
and  British  law. 

As  State  administrative  units,  the  industrial 
unions  resemble  in  principle  the  Roman  collegia 
more  than  they  do  trade  unions,  though  their 
connection  with  the  latter  organisations  domi- 
nates their  form  and  methods.  Like  the  early 
Anglo-Saxon  guilds  the  members  are  jointly  re- 
sponsible for  the  offences  of  their  members,  in 
so  far  as  they  incur  penalties  imposed  by  the 
arbitration  court.  This  frank-pledge  revival 
is  not  the  only  instance  where  legal  right  to 
employment  is  made  to  depend  upon  assuming 
financial  obligations  to  a  union.  Since  the  in- 
dustrial union  is  an  administrative  unit  created 
by  the  government  for  public  ends,  its  support 
is  a  public  function,  and  a  contribution  toward 
such  support  in  reality  a  public  tax.  The  maxi- 
mum limit  of  this  tax,  under  the  name  of  fees 
and  dues,  is  fixed  by  the  arbitration  court,  and 
that  court  enforces  the  payment  of  this  obli- 
gation. 

Arbitration  laws  not  only  regulate  the  re- 
lation of  the  individual  to  the  union,  but  also 


2O2  Aspects  of  Compulsory  Arbitration 

the  relation  of  unions  among  themselves.  A 
union  should  not  embrace  more  than  one  indus- 
try, and  within  that  industry  must  consist 
exclusively  of  employers  or  of  employees.  The 
craft  guild  will  never  reappear  under  an  indus- 
trial arbitration  act.  The  trade  union  principle 
survives,  because  the  derivation  of  the  indus- 
trial union  from  the  former  makes  this  histor- 
ically necessary;  but  the  cross-division  thus 
established  is  an  inconvenience.  For  instance, 
the  carpenters  are  organised  as  a  trade  into  a 
single  association,  but  industrially  they  are 
divided  into  a  number  of  bodies,  engaged  in 
building  operations,  in  factory  occupations, 
and  upon  public  works.  The  conditions  under 
which  they  labour  as  tradesmen  are  not  uni- 
form ;  but  the  conditions  under  which  they  work 
as  employees  in  a  single  industry  or  group  of 
industries  are  nearly  the  same.  As  industrial 
servants,  the  court  finds  it  easy  to  fix  terms  to 
employment  applying  to  any  one  class  of  car- 
penters; but  when  carpentering  as  a  trade  is 
under  consideration,  the  regulations  must  be 
modified  in  great  detail  to  apply  to  the  varying 


Aspects  of  Compulsory  Arbitration   203 

conditions  of  different  industries  of  which  it 
forms  a  part.  This  lack  of  a  consistent  princi- 
ple of  classifying  unions  also  causes  conflicts 
of  jurisdiction.  The  theory  of  the  law  allows 
but  a  single  organisation  in  an  industry.  The 
court  may  refuse  registration  to  a  society  if 
the  members  can  conveniently  belong  to  a  union 
already  registered.  Rival  unions  have  occa- 
sioned some  of  the  most  bitterly  contested  issues 
under  the  arbitration  laws.  The  bogus  union, 
formed  by  a  small  group  of  employees  disaf- 
fected with  the  existing  organisation,  with  the 
connivance  of  employers,  and  used  to  defeat  or 
hamper  the  operation  of  the  law,  has  been  the 
subject  of  parliamentary  investigations  in  New 
South  Wales.  Therefore  the  State  is  forced,  in 
its  increasing  control  over  labour  societies,  even 
to  limit  the  right  of  free  association  among 
workingmen.  For  although  workers  may  or- 
ganise for  purely  beneficiary  purposes  without 
regard  to  the  arbitration  law,  they  cannot 
attain  the  important  industrial  ends  of  such 
association  without  the  consent  and  support  of 
that  law.  So  the  tendency  is  for  a  single  union 


204  Aspects  of  Compulsory  Arbitration 

to  monopolise  each  industry.  This  does  not 
restrict  the  labour  market,  and  the  freedom  of 
workers  to  circulate  from  one  occupation  to 
another,  because  the  doors  of  admission  to  the 
union  are  held  open  by  the  court.  But  the  total 
effect  is  to  make  the  condition  of  status  more 
rigid.  For  a  multiplicity  of  organisations  al- 
lows greater  self-direction  and  contractual 
freedom  than  a  limited  number  of  organisa- 
tions. The  larger  the  group  of  men  submitted 
to  identical  regulation,  the  more  that  group 
resembles  a  caste. 

The  Australasian  legislator  has  not  been  re- 
stricted in  enacting  arbitration  laws  by  consti- 
tutional limitations  such  as  exist  in  the  United 
States.  To  create  a  new  law-making  body  with 
the  extensive  powers  of  an  arbitration  court  is 
virtually  to  amend  the  constitution.  An  Ameri- 
can legislature  could  not  enter  the  new  field  of 
regulating  wages  in  private  employment  with- 
out express  authority  from  the  people.  In  most 
States  no  power  exists  to  create  a  tribunal  with 
the  right,  without  a  trial  by  jury,  to  punish 
misdemeanours,  impose  a  fine  of  nearly  five 


Aspects  of  Compulsory  Arbitration   205 

thousand  dollars,  or  even  as  a  last  resort  to 
imprison  offenders.  Although  an  American 
legislature  might  declare  certain  classes  of  con- 
tracts in  the  future  illegal,  no  law  could  be  made 
so  sweeping  as  to  deprive  all  citizens  of  the  right 
of  making  individual  contracts  of  service,  with- 
out causing  a  revolution  in  our  system  of 
jurisprudence  that  would  encounter  the  veto  of 
the  higher  courts.  American  judges  hold  that 
the  legislature  cannot  make  laws  affecting  the 
interest  of  a  particular  class — set  apart  from 
the  whole  body  of  citizens.  These  decisions 
have  prevented  laws  in  favour  or  against  mem- 
bers of  trade  unions,  and  might  apply  to  pre- 
vent compulsory  preference  of  employment  even 
to  members  of  a  quasi-public  society  like  an 
industrial  union. 

The  history  of  arbitration  laws  shows  how 
rapidly  society  will  adopt  a  new  attitude  toward 
legal  rights  and  State  functions.  The  colonies 
did  not  enter  on  this  legislation  with  clear 
foresight  and  purpose.  The  form  and  effect  of 
these  experimental  statutes  were  not  pondered 
with  the  care  devoted  to  a  revolutionary  pro- 


206  Aspects  of  Compulsory  Arbitration 

gramme.  The  proposer  of  the  New  Zealand  law 
stated  in  the  debates  upon  the  bill,  that  a  vast 
majority  of  the  disputes  coming  before  the 
authorities  would  be  settled  by  conciliation, 
without  recourse  to  the  court.  The  function  of 
the  latter  body  was  not  regarded  as  legislative 
but  as  purely  judicial — or  rather  as  also  con- 
ciliatory. The  purpose  of  the  law  was  to  bring 
men  to  a  voluntary  agreement.  It  was  to  fur- 
ther, not  to  annul,  the  principle  of  private 
contract.  Even  the  decisions  of  the  court,  it 
was  thought,  would  derive  their  authority,  ex- 
cept in  extreme  cases,  from  the  consent  of  the 
parties.  State  intervention  was  justified  upon 
the  ground  that  existing  contractual  rights 
would  be  interpreted  and  enforced  by  the  court, 
not  that  new  rights  would  be  created.  Public 
authorities  were  expected  to  enforce  collective 
bargains  between  employers  and  employees;  it 
was  not  prominently  before  the  minds  of  the 
people  that  in  most  cases  they  would  be  called 
upon  to  make  those  bargains.  Therefore,  the 
presence  of  the  conciliation  boards  in  the 
earlier  statutes  was  a  historical  necessity.  Com- 


Aspects  of  Compulsory  Arbitration   207 

pulsory  arbitration  was  considered  something 
that  would  make  conciliatory  procedure  more 
effective,  that  would  influence  the  parties  to 
disputes  to  settle  their  difficulties  amicably,  that 
would  supplement  and  not  supplant  concilia- 
tion. Experience  has  shown  that  the  two 
principles  are  antagonistic.  The  compulsory 
survive  at  the  expense  of  the  voluntary  features 
of  the  law. 

The  forms  of  judicial  procedure  that  have 
been  embodied  in  this  legislation  are  a  result  of 
the  same  disappointed  anticipations.  It  was 
not  originally  proposed  to  legislate  regarding 
all  the  conditions  of  employment,  even  where 
conciliation  failed.  Those  conditions  were  as- 
sumed to  be  already  established  by  custom,  tra- 
dition, and  mutual  agreement.  The  projectors 
of  these  acts  appear  to  have  thought  that  a 
body  of  common  law  was  lying  latent  some- 
where in  industrial  practices,  that  only  needed 
the  interpretation  of  a  judicial  tribunal  to  be 
called  into  active  manifestation.  Canons  of 
equity  were  to  regulate  the  contractual  rela- 
tions of  masters  and  servants.  By  repeating  a 


208   Aspects  of  Compulsory  Arbitration 

very  ancient  legal  fiction,  a  jus  naturale  oper- 
ariorum  was  conjured  into  existence,  which  was 
to  guide  the  court  in  giving  decisions.  The 
law  was  supposed  to  be  already  in  being,  but 
awaiting  application;  the  rights  of  the  parties 
were  supposed  to  be  already  created,  but  await- 
ing definition  and  enforcement.  These  assump- 
tions were  natural  corollaries  of  the  conception 
of  an  arbitration  law  as  primarily  a  means  for 
enabling  disputants  to  settle  their  differences. 
Judicial  procedure  satisfied  the  original  intent 
of  the  statute. 

The  development  of  this 'legislation,  however, 
has  been  in  another  direction.  The  arbitration 
court  has  become  an  agent  for  regulating  indus- 
try. Its  action  has  been  mandatory  rather  than 
conciliatory,  not  because  the  judge  desired  to 
assume  this  attitude,  but  because  his  duties  and 
responsibilities  forced  it  upon  him.  The  work- 
ers regard  the  court  as  an  instrument  for  social 
betterment — as  a  substitute  for  strikes.  But 
the  economic  and  social  improvement  of  workers 
can  only  be  realised  by  changing  existing  con- 
ditions. There  is  no  body  of  industrial  tradi- 


Aspects  of  Compulsory  Arbitration  209 

tions  and  precedents  that  satisfies  these  de- 
mands. The  mutual  agreements  of  the  past  are 
no  criterion  upon  which  to  pattern  the  mutual 
agreements  of  the  future.  The  worker's  rights 
in  the  past  are  not,  in  his  opinion,  a  limit  upon 
his  rights  for  all  time  to  come.  Even  granting 
that  there  was,  before  the  arbitration  acts  were 
passed,  a  body  of  trade  custom  somewhat  like 
the  body  of  common  law,  the  growth  of  that 
body  of  custom,  its  adaptation  to  changing 
conditions,  could  only  continue  through  freedom 
of  contract.  But  freedom  of  contract  was 
abridged,  and  practically  abolished,  by  the 
arbitration  court.  That  court  assumes  a  con- 
trol over  the  development  of  this  hypothetical 
law  which  an  ordinary  civil  tribunal  does  not 
exercise  over  the  common  law.  Moreover,  the 
demand  for  changes  in  trade  customs  is  sup- 
ported by  a  homogeneous  class  with  identical 
interests.  This  demand  is  more  insistent,  con- 
stant, and  aggressive  than  any  demand  for 
modification  of  the  common  law.  So  the  court 
has  become  an  agency  for  industrial  reform. 
Workingmen  have  applied  for  nearly  all  the 


2 1  o  Aspects  of  Compulsory  Arbitration 

awards  granted  in  New  Zealand  and  Australia. 
Their  demands,  when  they  file  an  application 
before  the  court,  are  not  guided  by  past  condi- 
tions. They  are  not  such  as  are  likely  to  be 
conceded  by  employers  without  a  struggle. 
Each  party  would  rather  trust  to  the  decision 
of  the  court  than  compromise  the  issues  thus 
advanced. 

Therefore  the  court  is  obliged  to  make 
orders  covering  many  points  for  which  no  pre- 
cedents exist.  It  must  decide  upon  demands 
made  by  workers  for  new  rights.  Statutory  or 
customary  law  is  not  at  hand  to  guide  its 
decisions,  and  so  must  be  enacted.  But  a  new 
body  of  legislation  cannot  be  made  at  first 
self-consistent.  It  requires  constant  amend- 
ment to  correct  the  contradictions  and  omissions 
that  reveal  themselves  in  practice.  The  legisla- 
tive activity  of  the  court  is  consequently  stimu- 
lated from  two  directions,  by  the  increasing 
demands  of  workers  for  better  terms  of  employ- 
ment, and  by  appeals  from  both  parties  to 
have  conditions  previously  imposed  made  more 
workable. 


Aspects  of  Compulsory  Arbitration  2 1 1 

The  public,  observing  these  extending  func- 
tions of  the  court,  has  apparently  adopted  the 
view  that  it  should  control  a  very  broad  sphere 
of  industrial  administration.  While  it  is  still 
nominally  a  court,  its  legislative  functions  have 
been  accepted.  At  present  there  is  little  disposi- 
tion to  limit  its  regulative  authority.  The 
divergence  between  the  original  theory  and 
purpose  of  industrial  arbitration,  and  its  pres- 
ent development,  is  overlooked  or  disregarded. 
The  final  effect  of  this  new  institution  upon 
private  law  and  theories  of  government  is  not 
considered,  because  the  popular  attitude  to- 
wards this  legislation  is  opportunist  and  prac- 
tical. But  the  labour  party,  which  is  the  most 
active  supporter  of  industrial  arbitration, 
fancies  that  it  is  a  step  towards  state  socialism. 


CHAPTER  X 

ECONOMIC  AND   SOCIAL  EFFECTS   OF 
•  INDUSTRIAL  REGULATION 

THE  economic  effects  of  government  regula- 
tion of  industry  are  still  a  matter  of  contro- 
versy in  Australasia.  This  is  partly  because 
these  effects  are  obscured  by  their  complex 
relation  to  other  social  phenomena,  and  partly 
because  they  are  first  felt  by  employers,  who 
are  not  the  direct  beneficiaries  of  regulative 
legislation.  The  contention  that  the  capitalist 
is  benefited  by  having  wages  fixed  and 
other  conditions  of  employment  determined 
by  a  government  authority,  is  sometimes  sup- 
ported by  plausible  arguments;  but  it  is  con- 
tradicted by  the  attitude  of  most  employers 
towards  these  laws.  As  a  body,  they  op- 
pose compulsory  arbitration  and  minimum  wage 
boards.  Their  interests  are  distinctively  eco- 
nomic, and  their  opposition  centres  itself  in  the 
•is 


Effects  of  Industrial  Regulation     213 

assertion  that  the  economic  effects  of  such  laws 
are  bad.  On  the  other  hand,  this  legislation  is 
supported  by  the  workers,  who  are  primarily 
interested  in  its  social  effects.  To  them  the 
economic  effects,  except  so  far  as  they  react 
upon  social  conditions,  are  of  secondary  impor- 
tance. Therefore,  the  positive  arguments  in 
favour  of  these  laws  are  largely  social,  and  the 
arguments  advanced  against  them  are  economic. 
The  philosophical  advocates  of  compulsory 
arbitration  justify,  their  position  upon  the 
ground  that  industrial  disputes  between  em- 
ployers and  employees  adversely  affect  the 
general  welfare,  and  compromise  the  rights  of 
third  parties.  Especially  do  they  bring  suffer- 
ing upon  the  weaker  members  of  the  community, 
the  wives  and  children  of  strikers  and  all  those 
dependents  and  semi-dependents  whose  well- 
being  is  conditioned  by  a  normal  degree  of  local 
prosperity.  In  strikes  and  lock-outs,  might 
makes  right,  Justice  miscarries,  the  procedure 
does  not  satisfy  the  moral  sense  of  society. 
Historical  analogy  predicts  that  State  jurisdic- 
tion may  sometime  be  extended  to  such  disputes. 


214     Effects  of  Industrial  Regulation 

Under  one  very  important  aspect,  social  prog- 
ress is  but  a  record  of  the  process  by  which 
successive  classes  of  controversies  have  been 
withdrawn  from  the  sphere  of  private  settle- 
ment and  made  subject  to  public  adjudication. 
All  matters  now  brought  into  court  were  once 
decided  by  the  club  or  the  sword.  Property 
rights  were  first  established  and  maintained  by 
force,  then  settled  by  voluntary  arbitration,  and 
last  of  all  determined  by  the  judgment  of  a 
public  tribunal.  Roman  legal  actions  retain 
traces  of  all  three  of  these  stages  of  procedure. 
Whenever  state  interference  has  been  extended 
to  cover  a  new  class  of  disputes,  it  has  been  in 
response  to  the  same  considerations  that  apply 
to  strikes  and  lock-outs.  The  justification  for 
such  extension  has  been  found  in  public  policy — 
the  need  of  maintaining  peace  in  the  commu- 
nity, and  of  protecting  third  parties  from  inter- 
ference and  inconvenience — as  well  as  in  the 
ideal  end  of  securing  abstract  justice  for  the 
disputants.  None  of  these  arguments  is  dis- 
tinctively economic,  although  material  prosper- 
ity is  doubtless  furthered  by  industrial  peace. 


Effects  of  Industrial  Regulation     2 1 5 

The  favourable  attitude  of  labour  toward 
compulsory  arbitration  is  not  uninfluenced  by 
the  fact  that  workers  have  found  it  easier  to 
better  their  economic  position  in  relation  to 
their  employers  by  appealing  to  the  court  than 
by  engaging  in  a  strike.  Nevertheless,  they, 
like  most  other  Australasians,  are  probably 
willing  to  pay  a  price  in  material  welfare  for 
the  increase  in  social  and  moral  welfare  which 
they  think  these  laws  have  brought  them.  But 
as  they  do  not  concede  to  the  opponents  of  this 
legislation  that  State  regulation  has  lessened 
industrial  prosperity,  the  main  controversy 
with  regard  to  compulsory  arbitration  has  been 
as  to  its  economic  effects. 

Probably  the  influence — good  or  bad — of 
State  regulation  upon  the  prosperity  and  devel- 
opment of  industries  has  been  exaggerated. 
The  general  welfare  of  Australasia  depends 
principally  upon  the  export  market  for  certain 
raw  materials,  especially  wool  and  provisions, 
and  upon  local  climatic  conditions.  These 
two  factors  are  so  preponderant  that  all  others 
sink  into  relative  insignificance.  A  third  com- 


2 1 6     Effects  of  Industrial  Regulation 

modity  contributing  largely  to  the  wealth  of 
those  countries  is  the  mineral  product,  which 
provides  a  cash  income  of  gold  and  silver  for 
Australia  larger  in  proportion  to  the  popula- 
tion than  that  from  the  same  source  of  any 
other  country.  This  is  a  steadying  industry, 
nearly  independent  of  climatic  conditions  and 
ordinary  market  fluctuations.  Labour  condi- 
tions naturally  influence  all  these  forms  of 
primary  production ;  but  those  imposed  by  an 
arbitration  court  are  not  a  determining  factor 
in  their  prosperity.  Indeed  State  regulation 
applies  to  the  industries  that  are  the  main 
source  of  national  income  only  to  a  very  limited 
extent. 

During  the  eight  years  preceding  the  enact- 
ment of  the  compulsory  arbitration  law,  the 
total  exports  of  New  Zealand  increased  from 
$35,308,290  to  $44,663,781,  or  less  than  twen- 
ty-seven per  cent.,  and  during  the  eight  years 
following  that  event,  from  the  latter  sum  to 
$71,062,030,  or  more  than  fifty-nine  per  cent. 
Only  six  per  cent,  of  the  latter  amount  repre- 
sents the  product  of  manufactures,  but  these 


Effects  of  Industrial  Regulation     2 1 7 

increased  more  rapidly  than  the  total  exports, 
or  from  less  than  a  million  dollars  to  $4,362,- 
295,  during  eight  years  of  arbitration,  though 
they  had  decreased  during  the  preceding  period. 
Secondary  production  is  mostly  conducted 
under  arbitration  awards  and  primary  pro- 
duction under  free  contract.  However,  manu- 
facturing enterprises  have  been  carried  along 
by  the  growing  prosperity  of  the  farmers.  This 
prosperity  is  due  to  good  seasons  and  an 
exceptional  demand  for  New  Zealand  produce, 
caused  partly  by  the  South  African  war  and 
several  years  of  disastrous  drought  in  Aus- 
tralia. 

For  the  Commonwealth,  where  climatic  con- 
ditions have  been  the  reverse  of  those  in  New 
Zealand,  similar  figures  are  either  not  available 
or  not  fairly  representative.  The  states  have 
not  adopted  uniform  industrial  legislation,  and 
arbitration  laws  have  been  enacted  so  recently 
that  statistical  evidences  of  their  effects  are 
still  lacking.  Since  the  passage  of  the  oldest  of 
these  laws,  the  Victorian  minimum  wage  act, 
federation  has  been  accomplished,  and  a 


2 1 8     Effects  of  Industrial  Regulation 

national  tariff  with  free  trade  throughout  the 
Commonwealth  has  been  substituted  for  a  local 
tariff  and  free  trade  only  within  the  borders  of 
the  colony.  This  enlarged  market  has  caused  a 
great  expansion  of  manufacturing  in  Victoria. 
The  exportation  to  other  states  of  twenty- 
four  classes  of  locally  made  articles,  increased 
over  one  hundred  and  forty-seven  per  cent, 
during  the  first  two  years  after  the  national 
tariff  went  into  effect.  During  that  period, 
the  exports  of  garments  rose  from  $663,880 
to  $1,636,724,  and  of  boots  and  shoes  from 
$284,231  to  $1,144,294.  This  has  stimulated 
the  demand  for  factory  operatives  and  raised 
wages  in  many  skilled  occupations.  Meanwhile 
a  protracted  drought  decreased  the  purchas- 
ing power  of  the  people,  and  threw  agricultural 
labour  out  of  employment.  Consequently,  this 
manufacturing  prosperity  has  been  accom- 
panied by  a  large  emigration  to  South  Africa 
and  the  Western  Australian  gold  fields. 

The  evidence,  therefore,  does  not  show  that 
the  Australasian  countries  have  received  a  gen- 
eral setback  from  government  regulation  of 


Effects  of  Industrial  Regulation     2 1 9 

industries.  The  investment  of  foreign  capital 
may  have  been  checked  by  the  novelty  and 
uncertainty  of  this  legislation,  but  local  capital 
has  been  found  to  meet  the  demand  of  growing 
enterprises.  The  impression  the  country  makes 
upon  a  visitor  is  not  that  of  a  land  where 
industry  is  paralysed  and  business  stagnated, 
but  rather  the  reverse.  Permanent  and  costly 
buildings  are  being  erected  in  the  larger  cities, 
public  improvements  are  going  forward,  the 
wharves  are  crowded  with  shipping,  the  railway 
service  is  fully  occupied.  In  1903  the  building 
improvements  in  Sydney  were  valued  at  $14,- 
544,030,  and  those  in  Boston  at  $15,264,940. 
During  that  year  2,379  cottages  and  611 
larger  residences  were  built  in  the  Austra- 
lian city,  which  ranks  about  equal  in  popu- 
lation with  the  New  England  metropolis.  There 
are  few  evidences  of  excessive  unemployment. 
To  a  person  studying  conditions  in  Australasia, 
the  economic  argument  that  a  country  will  be 
industrially  ruined  by  State  regulation  is  not 
convincingly  demonstrated.  But  this  does  not 
prove  or  disprove  the  advisability  of  the  laws 


220    Effects  of  Industrial  Regulation 

embodying  these  experiments :  for  the  argument 
in  question  is  too  general  to  be  valid.  The 
prosperity  or  depression  of  a  country's  business 
rests  upon  a  broader  basis  than  an  industrial 
arbitration  act. 

A  detailed  study  of  the  effects  of  this  legisla- 
tion leads  to  more  suggestive  results.  All 
untried  laws,  especially  in  a  new  field  of  experi- 
ment, develop  features  that  need  amending. 
Though  their  total  influence  may  be  good,  the 
benefits  they  confer  are  qualified  by  disadvan- 
tages. The  positive  objections  to  industrial 
regulation  are  supported  by  facts  of  the  latter 
character.  These  matters  of  complaint  relate 
to  features  in  the  application  of  the  law — that 
is,  to  errors  in  awards — to  features  of  the  law 
itself,  which  might  be  remedied  by  amending 
existing  statutes,  and  to  principles  inherent  in 
State  industrial  regulation,  and  therefore,  cer- 
tain to  characterise  any  future  development 
of  these  laws. 

A  detailed  criticism  of  award  errors  would 
not  throw  much  light  on  the  administration  of 
these  acts,  because  such  errors  usually  relate 


Effects  of  Industrial  Regulation     221 

to  technical  matters,  and  their  force  appeals 
only  to  experts  in  the  trade  affected.  But  their 
occurrence,  admitted  with  equal  frankness  by 
all  parties,  calls  attention  to  a  weakness  in  the 
law  itself.  Neither  the  judge  nor  the  lay  mem- 
bers of  the  court  have  expert  knowledge  of  the 
technical  matters  which  control  the  provisions 
of  an  award,  so  they  must  form  their  opinions 
upon  the  authority  of  others.  Even  if  they  are 
assisted  by  expert  assessors — and  the  latter 
agree,  which  seldom  happens — they  must  en- 
dorse the  findings  of  these  advisers  upon  faith. 
It  is  impossible  to  give  an  arbitration  court  a 
course  in  technology  with  each  new  set  of  pro- 
ceedings. Yet  the  theory  of  a  decision  upon 
testimony  in  industrial  matters  implies  ability 
not  only  to  weigh  the  facts  intelligently,  but 
also  to  discriminate  and  weigh  industrial  and 
technical  principles,  as  a  judge  discriminates 
and  weighs  principles  of  jurisprudence  in  a 
legal  decision.  For  this  the  judge  has  no  pre- 
vious training.  Indeed  he  may  be  particularly 
disqualified  by  his  legal  prepossessions  for  con- 
sidering practical  problems  of  industrial  ad- 


222     Effects  of  Industrial  Regulation 

ministration.  In  casting  about  for  principles 
of  equity  similar  to  those  governing  personal 
and  property  rights,  he  may  read  into  indus- 
trial regulation  theories  that  do  not  correspond 
with  facts. 

While,  as  a  dominant  influence  in  the  legis- 
lative activity  of  the  court,  the  judge  is  often 
a  failure,  his  presence  upon  the  arbitration 
bench  facilitates  its  judicial  functions.  His 
experience  in  administering  court  procedure 
and  sifting  evidence  is  as  valuable  in  an  arbitra- 
tion as  in  a  civil  tribunal.  His  training  also 
assists  him  to  formulate  general  rules  governing 
the  action  of  the  court  in  like  situations  in 
different  cases,  and  thus  gives  consistency  of 
statement  and  principle  to  the  clauses  of 
awards,  and  enables  intending  litigants  to  esti- 
mate beforehand  the  probable  attitude  of  the 
arbitration  authorities  toward  certain  claims, 
thus  sparing  them  unnecessary  expense  and 
effort  in  prosecuting  false  issues.  The  experi- 
ence of  the  judge  is  also  required  to  provide 
against  erroneous  interpretations  of  the  act 
constituting  the  arbitration  court,  and  fre- 


Effects  of  Industrial  Regulation     223 

quent  and  unnecessary  appeals  to  higher  tri- 
bunals. 

The  Victorian  system,  of  a  representative 
board  of  experts  in  each  trade  to  formulate 
conditions  of  employment,  secures  better  legis- 
lative results.  The  errors  in  determinations  are 
not  so  frequent  as  errors  in  awards,  although 
interested  parties  do  not  have  a  hearing  before 
a  board  as  they  do  before  a  court.  A  judge 
may  amend  the  orders  of  the  court,  and  there- 
fore remedy  serious  mistakes.  But  the  total 
effect  of  award  errors  is  not  to  be  measured 
by  the  obvious  cases  reconsidered  by  the  au- 
thorities. The  court's  decisions  seldom  adapt 
themselves  perfectly  to  working  conditions,  and 
continue  to  be  a  chafing  shoe  upon  the  feet  of 
industry. 

The  economic  effects  of  an  award  exceed 
those  of  a  collective  bargain,  because  the  latter, 
in  addition  to  being  compulsory,  is  less  flexible 
than  a  voluntary  agreement.  A  bargain  can 
be  adjusted  to  changing  local  conditions  with 
the  consent  of  all  parties  more  readily  than  an 
award,  which  is  the  law  of  the  land,  and  retains 


224     Effects  of  Industrial  Regulation 

its  usefulness  only  so  long  as  it  is  rigidly  en- 
forced. A  union  lax  in  requiring  every  detail 
of  an  award  to  be  observed,  establishes  a  pre- 
cedent prejudicing  its  future  claims  before  the 
court. 

Employers  vigorously  oppose » the  power  of 
granting  preference  to  unionists,  upon  the 
ground  that  it  limits  their  choice  in  selecting 
men,  takes  away  their  control  over  their  work- 
men, and  so  increases  the  labour  cost  of  pro- 
duction. But  this  complaint  has  not  been 
sufficiently  substantiated  by  specific  instances  of 
these  effects  to  prove  the  assertion.  Employers 
fear  that  an  industrial  union  may  exercise  the 
monopolistic  powers  of  a  trade  union,  without 
considering  that  it  is  a  creature  of  the  arbitra- 
tion court,  and  cannot  close  the  labour  market 
or  control  its  members  like  an  independent 
organisation. 

Every  award  awaiting  decision  is  pending 
legislation,  which  directly  affects  some  of  the 
most  important  conditions  under  which  a  busi- 
ness is  conducted,  and  indirectly,  through  the 
precedents  it  establishes,  influences  the  probable 


Effects  of  Industrial  Regulation     225 

course  of  similar  legislation  governing  other 
enterprises.  A  dispute  before  a  court  is  less 
serious  than  a  strike.  It  does  not  cause  a 
cessation  of  industry,  with  its  attendant  loss  of 
production,  acute  ill-feeling  between  employers 
and  employees,  and  other  economic  and  social 
evils.  But  these  suits  occasion  expense  and  loss 
of  time,  and  check  industry  so  far  as  they 
render  uncertain  future  conditions  of  produc- 
tion. There  are  single  employers  in  Austra- 
lia who  work  under  as  many  as  seven  awards. 
The  total  effect  of  having  these  disputes  con- 
stantly at  issue — and  they  may  await  decision 
a  year  or  more — resembles  that  of  an  agitation 
for  tariff  revision  in  the  United  States. 

Litigation  is  multiplied,  because  workmen 
will  bring  a  case  before  the  court  where  they 
would  not  risk  a  strike.  So  great  is  this  evil 
that  the  court  in  New  South  Wales  has  recently 
adopted  the  policy  of  giving  artificially  created 
disputes  no  standing  in  fact.  It  has  been 
proposed  to  require  the  consent  of  a  large  num- 
ber of  workers  to  start  a  dispute.  But  these 
are  palliatives,  not  remedies.  The  force  that 


226     Effects  of  Industrial  Regulation 

sets  arbitration  machinery  in  motion  is  a  class 
impulse,  and  would  manifest  itself  under 
any  conditions  established  by  an  act  that 
would  work — that  is,  that  would  prevent 
strikes. 

The  judge  may  make  the  terms  of  an  award  a 
common  rule,  applying  to  all  employers  in  a 
district  or  a  state,  because  justice  demands  that 
conditions  of  production  be  as  uniform  as  pos- 
sible for  all  producers.  This  power  is  not 
mandatory.  The  judge  is  allowed  to  establish 
differential  awards.  Still  the  tendency  of  in- 
dustrial regulation  is  to  standardise  terms  of 
employment,  and  therefore  to  enforce  the  com- 
mon rule  wherever  possible.  An  economic  effect 
of  this  policy,  in  industries  producing  articles 
capable  of  wide  distribution,  is  to  favour  partic- 
ular establishments.  Theoretically  there  are  a 
few  points  in  the  area  regulated  where  the 
uniform  conditions  prescribed  by  the  court  can 
be  most  economically  applied.  Under  the  more 
flexible  system  of  private  contract,  mutual  com- 
pensation occurs  between  different  places.  One 
manufacturing  centre  counterbalances  a  local 


Effects  of  Industrial  Regulation     227 

disadvantage  by  some  favourable  condition  not 
possessed  by  its  competitors.  Transportation 
facilities  may  be  limited  in  a  small  town,  but 
rents  and  wages  may  be  lower  than  in  a  city. 
Therefore,  were  the  court  to  apply  absolutely 
uniform  awards  equalising  wages,  a  wide  redis- 
tribution of  industrial  plants  would  follow.  But 
if  an  award  is  not  uniform,  friction  and  bicker- 
ing ensue  over  the  adjustment  of  special  privi- 
leges to  different  employers  or  localities. 

The  same  considerations  apply  to  large  as 
compared  with  small  establishments.  Uniform 
conditions  of  employment  favour  either  the  big 
or  the  little  proprietor  more  than  his  competitor. 
But  to  allow  differentials  in  wages  or  modifica- 
tions in  apprentice  conditions,  to  meet  the 
varying  requirements  of  these  two  classes  of  em- 
ployers, involves  the  court  in  endless  difficulties. 
Large  merchants  and  manufacturers  are  said  to 
have  entered  into  collusive  agreements  with  their 
employees  to  secure  orders  from  the  court 
detrimental  to  their  smaller  competitors.  These 
large  employers  and  the  urban  employers' 
unions  exert  an  active  influence  to  prevent 


228     Effects  of  Industrial  Regulation 

differential  awards,  and  are  supported  by  the 
court's  natural  desire  to  simplify  its  orders. 
They  are  more  aggressive  in  presenting  their 
claims  before  the  court,  and  find  it  easier  to 
procure  evidence.  Often  they  can  grant  con- 
cessions to  their  men  that  small  employers  and 
country  manufacturers  cannot  meet.  Their 
representations  and  interests  therefore  prepon- 
derate in  shaping  the  awards.  Consequently, 
an  economic  tendency  of  industrial  regulation  is 
to  centralise  industry. 

Upon  the  workers'  side,  also,  there  is  a 
division  of  interests.  This  is  likewise  over  the 
question  of  differentiation  or  uniformity.  The 
advantage  of  more  skilful  workmen,  who  are 
capable  of  earning  the  highest  wage,  lies  in 
having  awards  flexible  and  adaptable  to  the 
different  industrial  capacity  of  workers.  They 
are  favoured  by  division  of  labour  and  piece- 
work schedules.  The  average  or  mediocre 
worker,  on  the  other  hand,  desires  rigid  award 
conditions.  The  division  of  labour  injures  him, 
because  he  is  employed  in  less  profitable  opera- 
tions and  therefore  receives  a  lower  wage.  PieccJ 


Effects  of  Industrial  Regulation     229 

work  is  to  his  disadvantage,  because  he  accom- 
plishes less  than  rapider  workmen  whose  product 
influences  the  average  rate  of  payment.  He 
instinctively  seeks  to  obtain  awards  that  pre- 
scribe time  wages  and  the  least  possible  division 
of  factory  operations.  As  these  average  work- 
ers are  in  a  majority  and  control  the  unions, 
the  conflict  between  them  and  the  more  com- 
petent minority  seldom  comes  to  the  surface  in 
an  arbitration  court.  They  dictate  the  form 
that  applications  for  awards  shall  take,  and  so 
their  influence  alone  shapes  the  policy  of  the 
arbitration  authorities  from  the  side  of  the 
working-men.  This  influence  secures  conditions 
of  employment  that  discount  exceptional  abil- 
ity, and  deaden  the  enterprise  of  more  ambitious 
workers,  though  the  effect  is  less  in  mining  and 
unskilled  or  semi-skilled  occupations  than  in 
other  fields  of  labour.  For  where  it  is  made 
difficult  for  an  employer  to  place  adequate 
incentives  before  his  exceptional  men,  to  induce 
them  to  apply  their  utmost  abilities  to  their 
task,  the  workmanship  and  output  of  the  latter 
adjust  themselves  to  their  remuneration  as 


230     Effects  of  Industrial  Regulation 

gauged  by  the  wage,  workmanship,  and  output 
of  the  average  employee.  The  value  of  their 
potential  excess  of  service  is  thus  lost  to  them- 
selves and  the  community. 

This  tendency  is  sometimes  accentuated  by 
the  attitude  of  employers  toward  the  minimum 
wage.  When  the  court  prescribes  a  minimum 
equal  to  or  above  the  average  wage  previously 
paid,  the  employer  may  meet  this  change  by 
two  different  policies.  In  order  to  keep  his 
payroll  down,  he  often  lowers  the  pay  of  his 
more  competent  hands,  to  compensate  himself 
for  the  higher  rate  he  is  obliged  by  law  to  give 
his  poorer  workers.  This  brings  about  a  level 
wage  for  all  employees.  Such  effect  has  been 
remarked  by  a  royal  commission  investigating 
the  operation  of  the  wage  boards  in  Victoria, 
and  has  been  commented  upon  in  the  decisions 
of  the  arbitration  court  in  New  Zealand.  Sta- 
tistics indicate  that  in  probably  a  third  of  the 
occupations  regulated  by  the  court  in  that 
colony,  the  maximum  wage  does  not  exceed  the 
minimum  fixed  by  the  award.  The  greatest  vari- 
ation usually  occurs  in  industries  requiring  the 


Effects  of  Industrial  Regulation     231 

highest  degree  of  skill.  In  such  industries  the 
employer,  in  order  to  maintain  a  gradation  of 
wages  among  his  workmen,  usually  discharges 
his  less  efficient  employees.  If  he  can  secure 
more  competent  hands  to  fill  their  places,  his 
labour  expense,  in  proportion  to  product,  is 
not  affected  by  the  court's  orders. 

However,  slow  workers,  who  are  not  a  negligi- 
ble element  in  the  industrial  army,  then  become 
a  social  problem.  They  form  from  ten  to 
twenty  per  cent,  of  all  workmen,  and  their 
distress  is  an  evil  greater  than  ordinary  unem- 
ployment. Some  manufacturers  in  Victoria 
dismissed  sixty  or  seventy  hands  as  soon  as  the 
minimum  wage  went  into  effect  in  their  business. 
All  the  Australasian  laws  give  the  regulating 
authority  power  to  fix  a  lower  rate  of  pay  for 
slow,  aged,  and  infirm  workers;  but  this  is  not 
a  sufficient  remedy.  Employers  refuse  to  receive 
slow  workers  in  their  shops,  because  they 
slacken  the  pace  of  other  workmen.  More- 
over, the  formalities  required  to  secure  slow- 
worker  permits  embarrass  both  employee  and 
employer. 


232     Effects  of  Industrial  Regulation 

Therefore,  State  regulation  of  industry 
places  a  burden  upon  the  weaker  members  of 
society.  The  labour  party  proposes  to  remedy 
this  evil  by  old-age  pensions.  To  absorb  her 
surplus  labour,  New  Zealand  has  undertaken 
great  public  works,  paid  for  from  loans. 
Western  Australia  has  until  recently  possessed 
a  growing  field  of  employment  in  the  newly  dis- 
covered gold  districts.  New  South  Wales  and 
Victoria  have  not  enjoyed  these  exceptional 
conditions,  and  in  the  latter  state  especially 
the  problem  of  the  slow  worker  has  been  serious. 
But  nowhere  in  Australasia  has  there  been  the 
special  difficulty  that  America  encounters  from 
the  large  immigration  of  foreign  workmen, 
who  possess  little  skill  and  are  accustomed  to 
a  different  industrial  system  and  a  lower 
standard  of  living  than  the  resident  population, 
and  are  therefore  worth  less  to  employers  than 
native  workmen. 

Slow  workers  thrown  out  of  employment  by 
the  minimum  wage  sometimes  open  shops  in 
basements  and  attics,  where  they  make  goods 
which  they  peddle  directly  to  retail  dealers, 


Effects  of  Industrial  Regulation     233 

or  sell  to  factories  at  prices  lower  than  the 
ordinary  cost  of  manufacture.  This  has  oc- 
curred in  boot  and  harness  trades,  and  to 
some  extent  in  cigar-making.  However, 
only  a  few  industries  lend  themselves  to 
this  process  of  dispersion.  No  handworker 
can  compete  with  the  products  of  power 
machinery. 

All  regulations  restricting  the  freedom  of 
employers  in  conducting  their  business  probably 
add  to  the  cost  of  production.  Some  arbitra- 
tion awards  have  caused  dealers  to  import  where 
they  formerly  manufactured.  Such  a  result  is 
especially  apt  to  occur  in  infant  industries. 
This  outcome  of  arbitration  suggests  another 
respect  in  which  State  regulation  has  been 
simpler  in  Australasia  than  it  would  be  in  the 
United  States.  The  industries  affected  by  these 
laws  seldom  encounter  free  competition  from 
other  countries.  Where  awards  increase  the 
cost  of  production  so  as  to  hamper  manufac- 
tures, the  profit  of  the  producer  is  maintained 
by  a  higher  tariff.  But  a  country  exporting 
manufactures  does  not  have  this  remedy.  The 


234     Effects  of  Industrial  Regulation 

increased  cost  of  production  must  be  paid  out 
of  profits,  as  prices  cannot  be  raised  to  con- 
sumers in  other  countries  without  sacrificing 
trade  to  foreign  competitors.  If  such  laws 
were  in  operation  in  exporting  countries,  these 
considerations  would  influence  the  court  not  to 
impose  terms  upon  employers  essentially  more 
burdensome  than  those  in  competing  countries 
where  no  government  regulation  existed.  There- 
fore, the  awards  would  be  little  more  than  a 
statement  of  terms  of  employment  already 
prevailing.  If  through  an  error  of  unwise 
altruism,  the  court  did  seriously  modify  condi- 
tions of  production,  the  speedy  loss  of  foreign 
orders  would  lessen  employment,  and  make 
further  intervention  necessary  to  remedy  this 
second  evil.  In  the  collieries  of  New  South 
Wales,  which  export  a  large  share  of  their 
product,  coal-cutting  machinery  was  introduced 
to  compensate  the  added  cost  of  production  and 
difficulty  of  labour  administration  caused  by 
an  award.  A  similar  remedy  might  avail  for 
a  time  where  regulated  manufactures  were 
obliged  to  compete  with  free  industries  in 


Effects  of  Industrial  Regulation     235 

other  countries.  But  such  a  palliative  would 
be  but  temporary,  until  the  competing  country 
adopted  the  same  mechanical  economies. 

These  considerations  apply  only  to  industries 
supplying  commodities  for  interstate  or  inter- 
national commerce.  Where  the  workers  whose 
terms  of  employment  are  fixed  by  the  court  are 
engaged  in  producing  articles  for  exclusively 
local  use,  distant  competition  does  not  directly 
modify  the  economic  effectiveness  of  the  awards. 
The  builder,  the  grocer,  the  employing  baker, 
blacksmith,  custom  tailor,  butcher,  and  other 
purveyors  to  domestic  needs  simply  add  the 
increased  cost  of  production  to  the  price  of  the 
service  or  the  article  they  furnish,  and  thus 
subtract  it  from  the  income  of  their  working- 
men  consumers.  In  both  New  Zealand  and  Aus- 
tralia many  definite  instances  have  occurred 
where  prices  have  been  raised  as  a  direct  and 
acknowledged  result  of  the  awards.  Employers 
have  entered  into  collusion  with  their  employees 
to  enforce  an  industrial  agreement,  or  to  secure 
an  award  for  the  purpose  of  justifying  a  rise  of 
prices.  Employers  are  compelled  by  the  arbi- 


236     Effects  of  Industrial  Regulation 

t ration  laws  to  form  unions,  and  they  employ 
these  organisations  to  restrict  competition 
among  themselves.  The  rules  of  an  employers' 
union  in  Western  Australia  impose  a  fine  on  any 
member  cutting  union  prices  or  dealing  with  a 
person  who  sells  under  these  prices,  and  provide 
that  such  fines  shall  be  recovered  before  the 
arbitration  court,  the  same  as  other  legal  claims 
against  the  members.  Many  employers  fix  their 
profits  at  a  certain  per  cent,  of  their  business 
expenditures,  and  so  are  benefited  by  an  award 
that  raises  the  cost  of  production. 

Therefore  industrial  regulation  increases  the 
cost  of  living.  This  has  been  so  marked  in  New 
Zealand  that  parliament  was  asked  officially  to 
remedy  an  evil  by  which  "the  advantages  be- 
stowed by  progressive  legislation  are  gradually 
being  nullified  and  will  eventually  be  destroyed." 
A  similar  demand  has  been  made  in  Victoria, 
where  it  is  claimed  that  so  long  as  the  govern- 
ment fixes  wages,  it  should  also  fix  prices;  for 
the  free  manipulation  of  the  latter  may  render 
ineffective  any  regulation  of  the  former.  The 
same  suggestion  has  been  voiced  as  a  future 


Effects  of  Industrial  Regulation     237 

possibility  by  the  leader  of  the  labour  party  in 
New  South  Wales. 

The  rise  in  prices  following  the  application  of 
awards  to  local  occupations  is  a  tax  on  all 
labour.  This  tax  is  distributed — it  falls  upon 
the  independent  worker,  the  farmer  and  the 
manufacturing  artisan,  as  well  as  upon  the 
wage-earner.  The  secretary  of  labour  in  New 
Zealand  says  that  "It  has  helped  to  mimimise 
any  advance  in  the  workers'  wages."  The 
farmer  cannot  recoup  himself  for  the  tax 
placed  upon  him  by  the  increased  cost  of  serv- 
ices and  local  supplies,  by  adding  to  the  price 
of  his  produce,  for  that  is  determined  in  the 
London  markets.  His  enterprise  must  therefore 
bear  the  full  burden  of  industrial  regulation. 
Likewise  the  factory  operative  whose  manufac- 
tures are  exported,  or  meet  the  competition  of 
imported  articles,  cannot  employ  an  arbitration 
law  to  raise  his  nominal  wages  without  lessening 
employment  and  defeating  his  own  end  of  social 
betterment.  But  he,  like  the  farmer,  must  pay 
the  increased  price  for  local  services  and  prod- 
ucts which  such  a  law  occasions,  and  thus  his 


238     Effects  of  Industrial  Regulation 

real  wage  is  lowered  by  the  very  legislation  thai 
was  devised  for  his  welfare. 

The  discretion  of  the  judge  checks  man] 
economic  evils  that  might  result  from  Statt 
regulation  of  industry.  The  increase  of  price! 
is  beyond  the  court's  control.  But  the  mail 
features  of  awards  are  determined  by  practica 
exigencies,  and  adapted  to  actual  situations 
They  are,  therefore,  modified,  like  voluntary 
agreements  and  trade  customs,  by  the  thousanc 
influences  that  determine  the  trend  of  industria 
life.  The  court  cannot  create  the  atmosphere  ir 
which  it  works.  It  cannot  reverse  the  laws  oi 
gravity  and  enable  the  working  people  to  rais< 
themselves  by  their  bootstraps  to  a  higher  eco 
nomic  plane.  Its  orders  must  conform  t( 
economic  law,  or  be  speedily  rendered  ineffect 
ive  by  contact  with  stubborn  facts.  Conse 
quently,  awards  ultimately  become  mere  forma 
statements  of  average  conditions  of  employ 
ment.  The  chief  economic  benefit  worker* 
derive  from  them  is  that  they  render  conditions 
of  production  sufficiently  uniform  in  different 
establishments  to  keep  unfair  employers  fron 


Effects  of  Industrial  Regulation     239 

obtaining  a  competitive  advantage  by  oppress- 
ing their  employees.  Although  the  court's 
influence  upon  the  average  economic  condition 
of  the  working  people  may  be  unimportant,  it 
can  effectively  prevent  unwholesome  inequalities 
in  their  condition. 

The  social  effects  of  State  regulation  of  in- 
dustry respond  more  directly  to  the  purpose  of 
this  legislation  than  the  economic  effects,  and 
so  must  answer  for  its  success.  The  object  of 
arbitration  laws  is  to  prevent  strikes;  and  they 
may  fairly  be  said  to  have  discouraged  strikes. 
A  few  of  these  disturbances  have  occurred  in 
each  state  and  colony  where  arbitration  is  in 
force.  Even  before  the  New  Zealand  act  was 
passed,  the  relations  of  employers  and  employ- 
ees in  that  colony  were  normally  so  harmonious 
that  it  is  difficult  to  show  positively  that  the 
industrial  peace  at  present  prevailing  is  due  to 
legislation.  In  New  South  Wales  and  West- 
ern Australia  strikes  of  some  consequence  have 
occurred  in  defiance  of  the  court.  Those  of  the 
former  state  were  in  the  collieries.  In  Western 
Australia  some  three  thousand  lumbermen  and 


240     Effects  of  Industrial  Regulation 

sawmill  employees  ceased  work  to  enforce  de- 
mands made  on  their  employers  for  concessions 
not  granted  in  the  award,  and  compelled  a  com- 
promise modifying  the  court's  order. 

The  labour  unions  prudently  withdrew  from 
official  participation  in  these  troubles,  and  their 
funds  were  not  at  the  disposal  of  the  strikers. 
The  sympathetic  strike  has  been  rendered  prac- 
tically impossible  by  the  law.  It  has  become 
difficult  to  finance  a  protracted  struggle  be- 
tween workingmen  and  employers.  All  the 
advantage  which  labour  receives  in  such  diffi- 
culties from  permanent  organisation  and  mu- 
tual support  is  lost.  Petty  disturbances,  which 
might  continue  indefinitely  without  organised 
support,  the  court  can  suppress.  Large 
strikes  cannot  be  prolonged  without  more  ma- 
chinery than  labour  possesses  since  the  court 
has  obtained  control  of  the  organisations. 
Strikes  are  crimes,  with  penalties  attached. 
Theoretically  all  persons,  and  in  practice  lead- 
ers, can  be  fined  or  imprisoned  for  engaging  in 
them.  The  moral  effect  of  this  prohibition  is 
considerable,  and  the  amount  of  real  compulsion 


Effects  of  Industrial  Regulation     241 

exercised  by  the  community  to  repress  strikes 
may  be  increased  through  existing  machinery  to 
any  required  degree. 

An  arbitration  law  does  not,  however,  rest 
equally  upon  employers  and  employees,  because 
the  former  are  held  to  its  strict  observance  by 
their  financial  responsibility,  while  workers  can. 
evade  many  of  its  provisions.  In  minor  matters, 
the  sanction  behind  the  court's  orders,  so  far  as 
it  applies  to  workmen,  will  always  remain  to  a 
large  extent  a  moral  one.  But  possibly  this 
appeal  to  the  honour  and  civic  responsibility  of 
the  worker  is  a  more  adequate  influence  in 
favour  of  industrial  peace  than  harsher  meas- 
ures. These  laws  do  appear — in  spite  of  the 
occasional  defiance  of  their  orders — to  increase 
the  law-abiding  spirit.  The  public  opinion  of 
workingmen  supports  their  observance  as  a 
matter  of  principle.  Whether  the  strike  as  an 
instrument  for  enforcing  labour  demands  falls 
into  absolute  disuse  or  not,  this  spirit  is  a  social 
gain. 

The  court  has  assumed  a  sympathetic  atti- 
tude toward  labour,  and  has  been  disposed  to 


242     Effects  of  Industrial  Regulation 

concede  any  claim  tending  toward  social  better- 
ment. In  both  New  Zealand  and  New  South 
Wales,  its  orders  have  decreased  child  labour 
and  sweating.  Indirectly  the  awards  maintain 
standards  of  workmanship,  by  regulating  ap- 
prenticeship and  the  pay  of  improvers,  and 
requiring  that  only  journeymen  shall  do  certain 
grades  of  work.  These  regulations,  however, 
are  inspired  by  social  rather  than  economic  or 
industrial  motives,  it  being  the  primary  desire 
of  the  authorities  to  discourage  the  employment 
of  children  rather  than  to  maintain  craft 
standards.  In  some  forms  of  manufacturing, 
the  awards  in  New  South  Wales,  and  the  de- 
terminations of  the  wage  boards  in  Victoria, 
have  also  favoured  the  employment  of  men 
instead  of  women.  They  have  shortened  the 
hours  of  labour  and  made  them  uniform 
throughout  the  same  industries,  and  by 
overtime  regulations  discouraged  Sunday 
work. 

The  total  social  effect  of  industrial  regula- 
tion is  to  increase  the  control  of  labour  over  the 
conditions  of  production.  The  positive  action  of 


Effects  of  Industrial  Regulation     243 

government  authorities  is  guided  by  the  claims 
of  workers.  They  determine  largely  the  extent 
and  character  of  the  issues  that  come  before 
the  court.  Merely  by  securing  the  consideration 
of  these  claims,  they  create  precedents  extend- 
ing and  establishing  more  securely  their  right 
to  intervene  in  the  administration  of  industry. 
As  the  awards  also  regulate  profits  in  a  de- 
gree, the  indirect  administration  thus  enforced 
might  secure  nearly  every  practical  object  that 
would  be  attained  by  direct  government  ad- 
ministration of  industry. 

However,  if  the  State  were  the  employer,  the 
whole  body  of  citizens  would  be  equally  inter- 
ested, and  in  theory  equally  active  in  directing 
its  industrial  operations.  Under  the  present 
system  employers  and  employees  determine 
working  conditions.  The  arbitration  judge  is 
in  a  sense  the  people's  representative;  but  by 
virtue  of  his  position  and  the  demands  of  ju- 
dicial procedure,  he  is  a  passive  rather  than  an 
active  influence  in  shaping  the  course  of  indus- 
trial regulation.  So  at  present  the  government 
orders  business  to  be  conducted  according  to 


244     Effects  of  Industrial  Regulation 

the  demands  of  particular  classes.  The  inter- 
ests of  classes  rather  than  of  the  public  are 
consulted.  But  in  time  the  people  who  are  not 
employers  or  wage-earners,  especially  the  rural 
population,  may  resent  paying  high  prices  for 
services  and  commodities,  in  order  that  employ- 
ers and  employees  may  enjoy  State-protected 
privileges.  A  popular  demand  may  then  arise 
for  more  regulation,  for  some  method  to  pro- 
tect the  rights  of  the  consuming  public — the 
farmer,  the  professional  man,  and  the  person  of 
small  property.  This  might  manifest  itself 
first  in  laws  to  control  prices,  already  sug- 
gested, or  for  the  State  housing  of  citizens — 
recently  inaugurated  as  a  remedy  for  conditions 
caused  in  part  by  arbitration  awards  in  New 
Zealand — or  for  the  erection  of  State  industrial 
establishments  to  compete  with  those  reaping  a 
large  profit  under  tariff  protection  and  award 
control.  But  if  State  regulation  clearly  fails 
to  benefit  wage-earners,  the  country  will  proba- 
bly return  to  free  private  administration  of 
industry.  The  essential  fact  is  that  the  present 
condition  is  unstable.  The  workers  are  still 


Effects  of  Industrial  Regulation     245 

confident  that  State  regulation  does  help  them, 
and  will  continue  to  do  so.  Therefore,  the 
limited  experience  with  compulsory  arbitration 
up  to  the  present  suggests  the  possibility  of  a 
further  development  toward  State  socialism. 


CHAPTER  XI 
THE  GOVERNMENT  IN  BUSINESS 

THE  State  industries  of  Australasia  have  no 
historical  connection  with  the  political  labour 
movement.  They  were  mostly  undertaken  in 
early  days,  in  response  to  peculiar  local  condi- 
tions, and  often  by  conservative  ministries.  But 
they  are  now  popularly  regarded  as  examples 
of  successful  collectivism,  and  therefore  as  to 
some  extent  justifying  the  labour  programme. 

Government  ownership  is  confined  to  what  are 
known  in  American  law  as  public  industries  and 
"business  clothed  with  public  interest" — that  is, 
to  supplying  services  of  exceptional  and  imme- 
diate concern  to  the  whole  community.  In  the 
United  States  we  recognise  such  interest  by 
regulating  a  business  of  this  kind  through  com- 
missions or  administrative  officers.  In  Austra- 
lasia these  industries  were  assumed  by  the  State 
as  logical  extensions  of  its  primary  functions — 
246 


The  Government  in  Business     247 

and  this  was  made  easy  by  the  concentration  of 
those  functions  in  a  central  government.  Im- 
portant railways  have  from  the  first  been  built 
and  operated  by  public  authorities,  as  extensions 
of  the  earlier  state  wagon  roads ;  telegraphs  and 
telephones  have  developed  as  part  of  the  postal 
and  railway  service ;  land  banks  and  other  forms 
of  assisted  settlement  are  part  of  a  complex 
machinery  for  administering  the  public  domain 
and  promoting  land  sales.  Docks  and  wharves 
are  owned  by  the  government  as  subsidiary  to 
the  transportation  system.  The  State  coal 
mines  of  New  Zealand  were  justified  by  the  fact 
that  the  government  railways  are  the  largest 
consumers  of  coal  in  the  colony.  In  the  same 
colony,  government  life  insurance  has  been  in 
operation  well  toward  forty  years,  and  was  or- 
ganised when  there  was  no  other  apparent  way 
to  protect  the  people  from  the  unreliable  for- 
eign companies  who  largely  controlled  colonial 
business.  In  some  cases  the  government  has  en- 
tered business  as  a  competitor,  in  order  to  break 
the  hold  of  a  monopoly  upon  the  community. 
Financial  conditions  have  favoured  the  ex- 


248     The  Government  in  Business 

tension  of  government  industries.  As  ex- 
pressed in  interest  rates,  the  credit  of  the  State 
has  been  so  much  better  than  the  credit  of  pri- 
vate corporations,  that  the  latter  were  at  a  com- 
petitive disadvantage.  Less  money  has  been 
sent  away  from  Australasia  to  pay  for  the  use 
of  capital  than  would  have  been  sent  for  an 
equal  investment  in  private  enterprises. 

Contrary  to  what  seems  to  be  the  general  im- 
pression in  America,  municipal  trading  is  rela- 
tively unimportant  in  Australasia,  because  there 
local  government  is  in  every  sphere  subordinate 
to  central  government.  No  one  of  the  larger 
Australian  cities  owns  and  operates  its  traction 
system.  The  electric  lines  of  Sydney  and  other 
cities  in  New  South  Wales  are  a  department  of 
the  state  railways.  Of  the  four  chief  cities  of 
New  Zealand,  two  own  and  operate  street  rail- 
ways, but  in  one  of  these  cities  there  are  also 
three  private  companies.  The  largest  city  in 
the  colony,  Auckland,  depends  on  a  regulated 
private  corporation  for  its  traction  service. 
Water  works,  harbour  works,  and  city  lighting 
plants  are  usually  administered  by  trusts  or 


The  Government  in  Business     249 

commissions,  independent  of  the  regular  civil 
service.  There  are  public  baths,  markets,  li- 
braries, schools,  hospitals,  and  charities,  much 
as  in  American  cities  of  equal  size. 

Melbourne,  in  the  state  of  Victoria — where 
local  government  is  active — conducts  the  most 
extensive  municipal  enterprises.  The  city  sup- 
plies electric  light  to  private  customers,  and 
owns  a  cold-storage  plant  in  connection  with  the 
principal  market,  where  meats  and  produce  are 
stored  for  merchants.  Part  of  the  space  is 
leased  to  the  state  commission  department, 
which  stores  and  ships  abroad  farmers'  produce, 
in  accordance  with  a  policy,  elsewhere  de- 
scribed, of  promoting  diversified  agriculture. 

In  New  Zealand  and  all  the  states  except  Vic- 
toria and  South  Australia,  there  are  relatively 
unimportant  private  railways,  the  longest,  with 
629  miles  of  track,  being  in  Western  Australia. 
These  roads  do  not  operate  in  competition  with 
government  lines,  nor  do  they  afford  data  for 
comparing  the  relative  economy  of  public  and 
private  ownership.  A  candid  comparison  of 
Australasian  railways  with  those  of  the  United 


250     The  Government  in  Business 

States  requires  so  much  qualification  as  to  have 
little  value  unless  for  experts.  In  Australia  the 
extremely  sparse  population,  the  peculiar  dis- 
tribution of  population  with  reference  to  traffic, 
the  commodities  carried,  the  climate  and  topog- 
raphy, the  cost  of  construction,  and  the  system 
of  financing,  are  all  different  from  those  of 
America.  On  account  of  the  arid  interior,  the 
trunk  lines  are  parallel  with  the  coast,  and  com- 
pete for  through  traffic  with  water  carriage. 
The  lines  leading  inland  are  stubs,  ending  in  a 
desert,  and  carry  no  freight  that  does  not  orig- 
inate along  their  courses.  The  population  is 
so  concentrated  in  a  few  coast  cities  that  sub- 
urban passenger  traffic  is  relatively  more  im- 
portant, perhaps,  than  in  any  other  country. 
Railway  materials  are  imported  burdened  with 
heavy  freights,  and  the  cost  of  unskilled  labour 
employed  in  construction  and  maintenance  is 
very  high.  The  railways  are  state,  not  federal, 
enterprises ;  and  their  gauge  varies  from  2  feet 
6  inches  in  Tasmania,  which  has  only  462  miles 
of  government  track,  to  5  feet  3  inches  in  Vic- 
toria and  a  part  of  South  Australia.  Finally, 


The  Government  in  Business     251 

as  complicating  financial  comparisons,  these 
systems  are  administered  under  seven  different 
methods  of  accounting,  and  afford  only  a  modi- 
cum of  comparable  data  for  obtaining  averages 
for  them  as  a  group. 

In  Australia  or  New  Zealand  no  government 
could  remain  in  office  that  did  not  provide  fairly 
good  transportation  facilities  for  its  constitu- 
ents. The  passenger  service  is  not  so  luxuri- 
ous, but  is  as  adequate  to  demands  of  the 
country  as  is  that  of  the  United  States.  Sepa- 
rate cars  or  compartments  are  furnished  for 
first-  and  second-class  passengers.  In  the 
United  States  the  average  charge  for  carrying 
a  passenger  a  mile  is  2.06  cents ;  in  Tasmania 
it  is  2.21  cents ;  and  in  South  Australia  it  is  1.8 
cents.  In  Western  Australia,  where  all  prices 
are  very  high  and  the  cost  of  operation  is  more 
expensive  than  elsewhere,  the  average  local  fare 
is  estimated  on  a  basis  of  3.8  cents  a  mile  for 
single-trip,  and  2.8  cents  a  mile  for  return 
tickets.  But  these  rates  are  lowered  very 
much,  when  reduced  to  general  averages,  by 
cheap  through,  season,  workingmen's,  and  sub- 


252     The  Government  in  Business 

urban  tickets,  so  that  the  average  fare  prob- 
ably does  not  greatly  exceed  two  cents  a  mile. 
Suburban  passengers,  within  twenty-two  miles 
of  Sydney  or  other  large  towns  in  New  South 
Wales,  pay  but  .953  cents  a  mile.  Tipping 
railway  servants  is  as  common  as  in  the  United 
States.  Sleeping-car  prices  are  slightly  higher 
than  in  America,  and  the  accommodations  are 
not  so  good. 

There  are  fewer  accidents  in  proportion  to 
the  number  of  passengers  carried  than  in  the 
United  States.  In  our  own  country  one  pas- 
senger out  of  every  1,622,267  is  killed;  in  Vic- 
toria one  out  of  14,779,025;  and  in  New  South 
Wales  one  out  of  every  17,567,075.  But  of 
the  59,116,103  passengers  carried  in  Victoria 
the  last  year  reported,  54,570,598  were  sub- 
urban passengers  in  Melbourne;  and  of  the 
35,158,150  passengers  carried  in  New  South 
Wales,  31,180,769  made  trips  within  twenty- 
two  miles  of  Sydney  and  the  other  cities.  Con- 
sequently the  average  trip  is  much  shorter  than 
in  the  United  States.  In  South  Australia,  for 
instance,  the  average  passenger  journey  is 


The  Government  in  Business     253 

11.68  miles,  as  compared  with  30.6  miles  in 
America.  Even  making  allowance  for  this, 
however,  it  is  evident  that  the  risk  of  travelling 
is  three  or  four  times  greater  in  the  United 
States  than  in  Australasia. 

Freight  charges  are  higher  than  in  America. 
This  is  due  to  three  principal  causes :  the  traf- 
fic is  not  as  dense,  the  average  haul  is  shorter, 
and  the  lines  and  their  equipment  are  lighter 
than  in  the  United  States.  In  South  Australia 
the  number  of  tons  of  freight  hauled  a  mile  for 
every  mile  of  line  is  115,635;  in  New  South 
Wales  it  is  139,669,  while  in  the  United  States 
it  is  829,476 — a  density  probably  six  times 
as  great  as  the  average  in  Australasia.  In 
New  South  Wales  the  average  haul  is  68  miles, 
in  South  Australia  120  miles,  and  in  the  United 
States  244  miles.  The  gauge  in  New  Zealand, 
Western  Australia,  Queensland,  and  for  1,238 
of  the  1,744  miles  in  South  Australia,  is  but  3 
feet  6  inches.  New  South  Wales  has  a  4  feet 
8  inch  guage,  but  in  1905,  the  average  weight 
of  trains  was  only  80.5  tons,  as  compared  with 
nearly  308  tons  in  America.  In  the  United 


254    The  Government  in  Business 

States  the  average  charge  for  hauling  a  ton  of 
freight  a  mile  is  .78  cents ;  in  New  South  Wales, 
exclusive  of  terminal  charges,  it  is  2.17  cents ; 
in  South  Australia,  2.069  cents,  and  in  Tas- 
mania, with  its  2  feet  6  inch  gauge,  3.69  cents. 
In  New  South  Wales  the  average  charge  for 
hauling  a  ton  of  grain  or  flour  a  mile  is  .87 
cents;  for  coal  or  coke,  1.247  cents;  and  for 
chilled  or  frozen  meat,  1.97  cents.  For  the 
same  length  of  haul,  these  charges  are  lower 
than  in  the  United  States.  For  a  haul  two 
miles  shorter  than  the  average  in  New  South 
Wales,  from  Mobile  to  Jonesboro,  Arkansas, 
the  rate  per  ton  mile  for  wheat  is  3.4  cents,  or 
about  four  times  the  average  in  the  Austra- 
lian state;  and  the  rate  from  Fergus  Falls, 
Minnesota,  to  St.  Paul,  a  distance  of  187  miles, 
is  1.55  cents  a  ton  mile — or  double  the  Austra- 
lian rate,  although  the  haul  is  nearly  three 
times  as  long.  The  tariff  on  anthracite  coal 
from  Pottsville  to  Baltimore,  179  miles,  is  1.12 
cents  a  ton  mile ;  and  from  the  same  point  to 
Perth  Amboy  it  is  1.16  cents — a  slightly  lower 
rate  than  in  New  South  Wales,  but  for  an  aver- 


The  Government  in  Business     255 

age  distance  at  least  three  times  as  great. 
From  Memphis  to  Jonesboro,  again,  the  rate 
on  packing-house  products  is  5.13  cents  a  ton 
mile,  or  considerably  more  than  two  and  a  half 
times  the  rate  in  the  Australian  state  just  men- 
tioned. Therefore,  although  average  freight 
rates  are  higher  than  in  America,  for  corre- 
sponding service  the  roads  of  New  South  Wales 
supply  their  customers  with  cheaper  carriage. 
The  average  charges  in  the  United  States  are 
lessened  by  the  low  cost  of  a  through  traffic, 
often  competing  with  inland  waterways,  that 
does  not  exist  in  Australia. 

Although  there  are  no  secret  rates  or  rebates 
on  government  railways,  the  authorities  give 
preference  in  the  open  rates  to  localities  where 
competition  exists  with  the  railways  of  other 
states.  This  rate-cutting  in  border  districts 
has  caused  several  interstate  conferences  and 
agreements  for  the  purpose  of  regulating 
charges,  none  of  which — at  least  until  very  re- 
cently— has  been  successful.  Victoria  gives 
preference  to  large  shippers,  under  the  name  of 
trader's  rebates,  to  the  extent  of  five  per  cent. 


256     The  Government  in  Business 

upon  freight  bills  amounting  to  $4,866;  and 
also  issues  free  transportation — two  annual 
passes  over  all  lines — to  shippers  paying  $97,- 
333  a  year  for  freight  service,  and  three  passes 
to  shippers  paying  $146,000.  Similar  privi- 
leges are  given  in  other  states.  However,  these 
preferences  are  open,  and  equal  to  all  under  like 
conditions — being  printed  in  the  published  rate 
books  issued  by  the  railway  departments. 

The  hours  worked  by  railway  servants  in 
Australia  and  New  Zealand  are  considerably 
less  than  in  the  United  States — and  are  often 
limited  to  eight  or  nine  a  day.  In  Victoria 
locomotive  engineers  work  eight  hours,  but  are 
obliged  to  take  extra  "engine  time" — amount- 
ing to  something  less  than  an  hour  a  day — for 
preparing  their  locomotives  for  the  road.  Su- 
perannuated employees  are  pensioned,  and  all 
skilled  employees  usually  have  an  annual  leave 
of  absence,  with  passes  over  the  lines  for  them- 
selves and  families.  In  the  United  States  the 
wages  of  engineers  and  conductors  average 
$3.61  and  $3.04  respectively,  as  compared  with 
$3.21  and  $2.44  in  New  South  Wales ;  on  the 


The  Government  in  Business     257 

other  hand,  in  America  firemen  receive  but  $2.03 
and  track  labourers  but  $1.18,as  compared  with 
$2.21  and  $1.75  in  the  latter  country.  The 
safety  of  employees  is  better  protected  in  Aus- 
tralia than  in  America.  In  the  United  States, 
the  last  year  reported,  one  railway  worker  was 
killed  for  every  357  employed,  and  one  injured 
for  every  19  employed ;  in  New  South  Wales  one 
was  killed  for  every  949  employed  and  one  in- 
jured for  every  18 ;  and  in  South  Australia,  of 
the  3,519  men  working,  none  was  killed  and  but 
one  in  every  195  injured.  Considering  all  con- 
ditions of  employment,  wages,  hours  of  labour, 
safety,  leaves,  pensions,  and  other  privileges, 
railway  servants  are  better  off  in  Australasia 
than  in  the  United  States. 

The  cost  of  construction  and  equipment,  in- 
cluding rolling  stock,  machinery, workshops,  and 
furniture,  varies  in  the  different  states  and  New 
Zealand,  from  some  $30,000  to  nearly  $64,000 
a  mile,  according  to  the  gauge  of  the  railroad, 
the  topography  of  the  country,  the  distance  of 
the  lines  from  the  coast,  and  also  the  date  when 
the  railways  were  built.  But  none  of  the  state 


258     The  Government  in  Business 

systems  in  Australasia  represents  as  high  an  in- 
vestment as  the  railways  of  the  United  States. 
The  Victorian  roads,  which  have  the  widest 
gauge  and  are  about  as  well  equipped  as  most 
lines  in  America,  cost  $59,188.40  a  mile;  those 
of  New  South  Wales,  with  several  expensive 
bridges,  tunnels,  and  mountain  grades,  cost  the 
most  of  any  in  Australasia,  or  $63,879.86  a 
mile.  The  capitalisation  of  American  railways 
is  $64,265  a  mile.* 

The  ratio  of  operating  expenses  to  earnings 
has  varied  widely  in  Australia  and  New  Zealand 
at  different  periods ;  but  is  not  increasing,  and 
in  most  instances  has  fallen  of  recent  years. 
Operating  charges  include  the  replacement  of 
rolling  stock — which  in  Victoria  amounted  to 
nearly  one- fourth  of  these  expenses  the  last 
year  reported — and  relaying  track;  but  they 
appear  not  to  include  the  sums  paid  in  pensions 
to  superannuated  employees.  In  the  different 
states  the  last  year  reported  the  per  cent,  of  the 
gross  revenues  used  for  running  the  railways 
was  as  follows:  Victoria,  52.23;  New  Zealand, 
*  "Coat"  and  "capitalisation,'  of  course,  are  not  comparable. 


The  Government  in  Business     259 

56.85;  South  Australia,  57.86;  Queensland, 
58.67 ;  New  South  Wales,  59.5  ;  Tasmania,  with 
its  light  and  narrow  mountain  lines,  74.3,  and 
Western  Australia,  which  nevertheless  paid  a 
profit  on  capital,  80.33  per  cent.  In  the 
United  States,  in  1903-4,  the  ratio  of  operating 
expenses  to  revenue  was  67.79  per  cent.,  and 
therefore  higher  than  the  average  in  Austra- 
lasia. These  figures,  however,  cannot  be  taken 
as  final,  as  no  two  accountants  exactly  agree  in 
the  items  they  respectively  charge  to  operating 
expenses  and  capital. 

The  economy  of  government  railways  to  the 
public  involves  other  factors  than  the  cost  of 
transportation.  Nowhere  in  Australasia  are  the 
people  taxed  unfairly,  in  the  price  they  pay  for 
commodities,  by  monopolies  created  through 
railway  favouritism.  Such  public  services  as 
the  transportation  of  mails  and  packages  prob- 
ably cost  less  than  in  America  under  the  same 
conditions.  The  government  does  not  have  to 
pay  mileage  for  its  employees.  "Non-paying," 
that  is,  government  traffic,  to  the  value  of  some 
$250,000  pter  annum  appears  in  the  Queensland 


260     The  Government  in  Business 

railway  report;  and  of  1,968,331  tons  of 
freight  carried  in  Western  Australia,  173,312 
was  transported  free  for  the  public.  States, 
counties,  and  towns  have  paid  no  bonuses  to  se- 
cure railways  or  competing  lines.  Finally,  the 
capital  to  build  the  railways  of  Australasia  has 
been  borrowed  at  better  rates — considering  the 
dates  and  periods  of  loans — than  capital  em- 
ployed for  the  same  purpose  in  the  United 
States.  The  people  of  Australasia  own  their 
railways  only  conditionally — subject  to  a 
bonded  indebtedness  approaching  their  capital 
value.  The  interest  on  this  debt  is  well  under 
four  per  cent. — 3.83  per  cent,  in  New  Zealand, 
3.58  in  New  South  Wales,  and  but  3.32  in  West- 
ern Australia. 

However,  the  desire  of  the  government  to 
keep  freight  and  passenger  rates  as  low  as  pos- 
sible, and  the  political  inexpediency  of  raising 
rates  even  when  too  low,  often  prevent  the  roads 
from  paying  interest  on  their  capital.  In 
1904-5  the  interest  charge  of  the  New  South 
Wales  railways  was  3.58  per  cent.,  and  the  net 
revenue  over  operating  expenses  3.46  per  cent., 


The  Government  in  Business     261 

leaving  .12  per  cent,  to  be  made  up  directly  by 
the  taxpayers.  New  Zealand  operated  at  a  loss 
of  .53  per  cent,  of  its  railway  capital,  which 
had  to  be  covered  from  taxation.  The  Victo- 
rian railways  paid  full  interest  upon  their  debt 
in  1903-4-  and  1904-5;  but  these  were  the  first 
years  they  had  done  so  since  1888-9.  Even 
then  no  return  was  paid  on  some  $19,000,000, 
including  about  $14,000,000  proceeds  from  the 
sale  of  public  lands,  which  the  state  has  in- 
vested in  railways  out  of  public  revenues. 
Western  Australia,  however,  has  usually  made  a 
profit,  above  interest  charges,  on  both  its  bor- 
rowed capital  and  the  state's  own  investment. 
Nevertheless  railway  deficits  are  the  rule — as 
post-office  deficits  sometimes  are  in  the  United 
States — and  are  estimated  by  Australasian  au- 
thorities to  have  exceeded  profits  by  $66,000,- 
000  during  the  decade  ending  with  1904.  To 
this  annual  burden  of  some  six  and  a  half  mil- 
lion dollars  must  be  added,  in  comparing  the 
relative  economy  of  public  and  private  lines,  the 
loss  of  over  $4,000,000  yearly  taxes, which  would 
have  been  paid  into  the  Australasian  treas- 


262     The  Government  in  Business 

uries  by  the  railways,  if  in  private  hands — as- 
suming the  rate  of  taxation  to  be  $5.37  per 
$1,000  valuation,  paid  by  such  corporations  in 
the  United  States. 

This  makes  a  balance  of  about  ten  and  a  half 
million  dollars  a  year  on  the  debit  side  of  gov- 
ernment ownership  in  Australia  and  New  Zea- 
land, which — if  the  account  is  to  stand  even — 
must  be  compensated  by  a  lower  charge  for 
service  than  private  lines  would  make,  and  by 
social  and  political  advantages,  such  as  the  bet- 
ter condition  of  employees,  fewer  accidents,  and 
the  absence  of  railway  corporations  from  poli- 
tics and  from  the  larger  spheres  of  industrial 
and  commercial  intrigue. 

Some  of  the  states  operate  steam  tram  lines 
and  electric  and  horse  railways  in  cities  and 
suburban  districts.  But  most  of  the  city  trac- 
tion of  Australasia  is  in  the  hands  of  private 
corporations.  So  far  as  fares  and  service  are 
concerned,  with  one  or  two  exceptions,  the  or- 
dinary patron  finds  little  to  distinguish  private 
from  public  lines.  Probably  the  poorest  serv- 
ice at  present  is  given  by  a  few  private  horse- 


The  Government  in  Business     263 

car  lines,  operating  under  an  expiring  fran- 
chise, in  Australia — but  until  recently  there 
were  municipal  lines  with  equally  poor  equip- 
ment and  service  in  New  Zealand.  The  Mel- 
bourne cable  lines,  which  are  conducted  by  a 
private  corporation,  under  a  contract  by  which 
the  city  ultimately  receives  the  track  and  equip- 
ment as  payment  for  the  franchise,  charge  a 
six-cent  fare  for  all  distances — which  is  the 
highest  rate,  for  equivalent  service,  in  Aus- 
tralasia. In  most  places  there  is  a  "penny," 
or  two-cent,  fare  for  each  section  of  one  or  two 
miles,  a  new  fare  being  collected  when  the  sec- 
tion limit  is  passed,  as  on  country  trolleys  in  the 
United  States.  Comparing  Melbourne  and 
Sydney,  the  two  largest  cities,  the  government 
traction  service  of  the  latter  is  much  better  and 
cheaper  than  the  private  service  of  the  former. 
But  the  electric  service  of  Sydney  is  not  better 
than  that  of  Brisbane  or  Auckland,  under  pri- 
vate ownership,  and  the  fares  are  the  same. 
The  Sydney  lines — probably  the  model  govern- 
ment system  of  Australasia — do  not  give  better 
or  materially  cheaper  service  than  those  of 


264     The  Government  in  Business 

Baltimore,  the  city  nearest  the  same  size  in 
America.  Though  the  average  fare  is  but  2.8 
cents,  several  fares  are  collected  from  the  same 
passenger,  especially  in  the  comparative  ab- 
sence of  transfers,  for  what  would  be  a  five-cent 
ride  in  the  United  States.  These  section  fares 
have  the  bad  effect  of  checking  the  dispersion  of 
urban  population,  by  making  it  cost  more  to 
get  to  the  suburbs  than  to  nearer  city  districts 
— though  in  Sydney  this  influence  is  more  than 
counteracted  by  cheap  suburban  railway  serv- 
ice. On  some  Sydney  lines  the  cars  are  as 
crowded  at  certain  times  of  the  day  as  are 
those  in  America.  Fatal  accidents  appear  to 
be  relatively  more  numerous  than  in  the  United 
States.  In  1902  the  government  tram  lines  of 
New  South  Wales  killed  32  persons  and  in- 
jured 545 ;  and  in  1903  they  killed  37  persons 
and  injured  594.  The  average  for  these  two 
years  was  one  passenger  killed  for  every  12,- 
419,562  fares  collected,  as  compared  with  one 
for  every  18,015,894  passengers  carried  in  the 
United  States;  and  one  passenger  injured  for 
every  869,378  fares  collected,  as  compared  with 


The  Government  in  Business     265 

one  for  every  178,876  passengers  carried  in  the 
United  States.  As  many  passengers  pay  sev- 
eral fares  for  the  same  trip  in  Australia,  these 
figures  would  be  still  more  unfavourable  for 
New  South  Wales  were  they  exactly  comparable 
with  those  in  the  latter  country.  One  wage- 
earner  was  killed  out  of  every  1,484  employed, 
as  compared  with  one  out  of  every  1,095  in 
America,  and  one  injured  out  of  every  15.3,  as 
compared  with  one  out  of  every  36.1  in 
America. 

The  Sydney  electric  railways  represent  a 
lower  investment  than  those  of  the  United 
States.  They  cost,  including  shops,  rolling 
stock,  and  other  equipment,  $140,000  per  mile 
of  track ;  while  the  net  capital  liabilities  of  the 
Baltimore  railways  are  $182,009  per  mile,  and 
the  average  in  cities  of  500,000  population  or 
over  in  the  United  States  is  $182,775  a  mile. 
The  lines  paid  2.9  per  cent. — over  operating 
expenses — upon  their  capital.  In  1905  the 
total  deficit,  including  operation  and  interest, 
amounted  to  about  $8,000;  but  this  year  a 
profit  of  over  $200,000  is  reported. 


266     The  Government  in  Business 

The  telegraphs  and  telephones  of  Australasia 
are  public  enterprises,  operated  in  connection 
with  the  post-office  and  the  railways.  They  do 
not  pay  interest  on  the  investment  in  Australia, 
though  they  have  recently  done  so  in  New  Zea- 
land. But  the  rates  are  lower  than  for  the 
same  service  in  the  United  States.  A  telegram 
of  sixteen  words  costs  twelve  cents  in  Melbourne, 
eighteen  cents  in  Victoria,  and  twenty-five  cents 
(an  English  shilling)  if  sent  to  another  state. 
The  annual  rental  of  business  telephones  is 
$43.75  in  Melbourne,  and  $34  in  country  towns. 
A  residence  telephone  in  Melbourne  costs  $24.33 
per  annum.  The  service  is  as  good  as  in 
America. 

State  aid  for  settlers — government  mort- 
gages on  agricultural  land — was  started  in  New 
Zealand  and  Western  Australia  in  1904,  and 
has  since  then  been  adopted  in  all  the  states  ex- 
cept Queensland.  The  authorities  loan  at  low 
rates  to  farmers  desiring  money  to  improve 
their  farms,  usually  requiring  repayment  in 
instalments,  together  with  the  interest.  The 
loans  are  confined  to  lands  suitable  for  agricul- 


The  Government  in  Business     267 

tural  improvement,  and  in  some  states  the 
money  is  turned  over  to  the  borrower  in  amounts 
only  sufficient  to  pay  for  the  improvements 
as  made.  In  New  Zealand  the  loans  are  au- 
thorised by  a  board  of  trustees,  similar  to  the 
loan  committee  of  a  bank,  on  appraisements 
made  by  special  officers  appointed  for  this  pur- 
pose. The  system  is  essentially  the  same  in 
other  states.  No  loan  is  made  for  less  than 
about  $125,  or  for  more  than  $14,600.  Fees 
for  appraising  and  examining  title  are  low — 
the  cost  of  securing  a  loan  in  New  Zealand  aver- 
aging considerably  less  than  one-half  of  one 
per  cent.  South  Australia  does  not  loan  more 
upon  land  than  its  assessed  value  for  taxes. 
New  Zealand  borrows  money  in  London  at  three 
and  a  fourth  or  three  and  a  half  per  cent.,  and 
reloans  it  at  five  per  cent.  South  Australia 
issues  mortgage  bonds  for  such  amounts  as  it 
requires  for  this  purpose,  usually  running  for 
five  years,  which  are  taken  up  readily  by  the 
local  banks  at  three  and  a  half  per  cent.;  and 
charges  the  borrowers  four  and  a  half  per  cent, 
interest.  The  Western  Australian  Agricultu- 


268     The  Government  in  Business 

ral  Bank  keeps  an  account  of  the  improvements 
made  with  funds  borrowed  from  the  govern- 
ment. The  loans  outstanding  in  1903  amounted 
to  about  $800,000,  with  which  improvements 
assessed  at  nearly  $1,350,000  had  been  made. 
These  included,  besides  other  things,  clearing 
76,306  acres  of  forest  land  and  ring-barking 
76,205  acres,  bringing  56,853  acres  under  cul- 
tivation, and  fencing  35,353  acres.  The  au- 
thorities report  that  the  only  loss  in  ten  years 
of  operation  was  $35  interest  written  off  their 
books.  The  operations  in  New  Zealand  have 
been  much  more  extensive,  over  $20,000,000  hav- 
ing been  loaned,  of  which  some  $13,000,000  is 
outstanding.  About  two-thirds  of  the  applica- 
tions for  loans  have  been  granted.  The  cost 
of  administering  the  department  is  less  than  .16 
per  cent,  of  the  capital  employed,  and  the  gov- 
ernment made  a  net  profit  of  $223,000  out  of 
these  operations  the  last  year  reported.  The 
prevailing  rate  of  interest  on  real  estate  mort- 
gages fell  from  seven  to  five  per  cent. — or  the 
level  of  the  government  rate — during  the  first 
ten  years  the  law  was  in  operation.  Bankers  in 


The  Government  in  Business     269 

New  Zealand  interviewed  as  to  the  effect  of  the 
law  spoke  of  its  results  without  disfavour,  seem- 
ing to  think  that  it  might  have  stimulated  busi- 
ness. 

Some  of  the  states  have  engaged  in  other 
financial  operations  for  the  purpose  of  bene- 
fiting the  farmers.  Queensland — as  mentioned 
in  an  earlier  chapter — loans  money  to  planters 
to  erect  sugar  mills  upon  the  security  of  their 
land.  The  same  state  has  levied  a  special  tax 
on  dairy  cows,  to  be  used  as  a  bounty  for  en- 
couraging creameries,  and  a  similar  tax  on 
other  live  stock  for  the  purpose  of  encouraging 
packing  companies.  South  Australia  and  Vic- 
toria have  undertaken  more  directly  to  promote 
agricultural  welfare  by  establishing  govern- 
ment commission  agencies  for  marketing  abroad 
some  kinds  of  farm  produce.  South  Australia 
was  the  pioneer  in  this  enterprise,  and  the  mo- 
tive of  the  authorities  was  to  finance  the  crop 
movement  promptly  and  cheaply,  as  well  as  to 
encourage  diversified  farming.  Private  capi- 
tal had  refused  the  risk  of  marketing  some  of 
the  experimental  crops.  Therefore  the  gov- 


270    The  Government  in  Business 

ernment  undertook  to  supply  cold  storage  and 
export  facilities — at  first  for  butter,  then  for 
mutton,  wine,  apples,  and  rabbits.  The  de- 
partment slaughters  the  animals,  chills  and 
ships  the  meat,  and  manufactures  fertilisers  of 
the  refuse.  It  forwards  crates  and  paper,  and 
advances  freights  to  apple  raisers,  charging 
against  sales ;  but  an  attempt  is  now  being  made 
to  have  private  merchants  take  up  this  business. 
Formerly  the  state  advanced  twenty-four  cents 
a  gallon  upon  wine  received  under  inspection, 
but  has  recently  turned  this  business  over  to  a 
private  syndicate.  The  government  maintains 
a  sales  depot  at  London,  and  handles  about 
$370,000  worth  of  produce  annually.  It 
charges  for  its  services,  sometimes  includ- 
ing railway  transportation,  against  receipts. 
There  is  no  attempt  to  make  this  industry  pay 
a  revenue,  the  net  returns  being  about  one 
per  cent,  on  the  cost  of  the  plant.  This  de- 
partment, which  is  not  regarded  by  its  officers 
as  necessarily  a  permanent  institution,  has 
served  its  purpose  of  stimulating  the  sale  of 
South  Australian  produce  in  Great  Britain. 


The  Government  in  Business     271 

South  Australia  and  Western  Australia  have 
provided  public  batteries  for  the  reduction  of 
ores,  and  in  some  districts  the  latter  state  sub- 
sidises private  batteries  to  reduce  ores  for  small 
miners.  These  enterprises  have  been  started 
principally  to  encourage  prospecting  and  de- 
velopment in  very  arid  or  remote  regions,  that 
might  not  otherwise  be  explored,  and  to  protect 
the  small  miner  in  districts  where  large  syndi- 
cates control  all  the  smelting  facilities,  and 
might  use  this  advantage  to  "freeze  out"  the 
prospector  without  capital.  They  about  pay 
expenses,  and  appear  to  suit  the  peculiar  con- 
ditions under  which  they  were  instituted. 

Government  life  insurance  was  established  in 
New  Zealand  long  before  the  question  of  state 
and  municipal  trading  became  prominent,  and 
is  by  no  means  a  monopoly,  as  the  department 
issued  but  41,291  of  the  94,429  policies  in  force 
in  the  colony  in  1905,  and  but  $47,411,563  of 
the  $114,694,811  insurance  carried.  The  as- 
sets of  the  department  are  $17,570,218,  and  the 
expense  of  management  is  20.71  per  cent,  of 
the  income  from  premiums,  and  13.9  per  cent,  of 


272     The  Government  in  Business 

the  gross  receipts.  Seventeen  Australasian  com- 
panies do  business  in  the  colony,  four  of  which 
have  lower  expenses  in  proportion  to  gross 
receipts,  and  two  less  expense  in  proportion  to 
income  from  premiums,  than  the  government  de- 
partment. The  largest  of  these,  the  Austra- 
lian Mutual  Provident  Association,  has  a  man- 
agement expense  as  low  as  13.58  per  cent,  of 
its  premium  income,  and  9.03  per  cent,  of  its 
gross  income. 

In  1903  a  state  fire  insurance  department 
was  organised  in  New  Zealand,  but  the  results 
of  its  business  are  not  yet  available.  However, 
insurance  rates  are  said  to  have  been  lowered 
from  ten  to  thirty-three  per  cent.,  on  different 
classes  of  risks,  since  its  establishment. 

The  government  of  New  Zealand  also  con- 
ducts a  public  trustee  office,  which  is  a  sort  of 
administrative  development  from  the  probate  or 
orphan's  court,  to  manage  the  estates  of  intes- 
tates, orphans  without  guardians,  and  others 
not  competent  to  control  their  property.  The 
office  has  in  charge  nearly  four  thousand  estates, 
with  an  aggregate  value  of  more  than  $17,000,- 


The  Gavernment  in  Business     273 

000.  There  is  little  if  any  hostile  criticism 
among  the  people  of  the  colony  either  of  this 
office  or  of  the  life  insurance  department. 

New  Zealand  owns  and  operates  two  govern- 
ment coal  mines,  both  of  which  have  been  opened 
recently  and  are  still  undergoing  development. 
Their  aggregate  output  the  last  year  reported 
was  94,033  tons,  which  was  sold  for  $528,000. 
The  profit  on  operation  was  about  $10,000,  but 
this  failed,  by  nearly  the  same  sum,  to  pay  in- 
terest on  the  debentures  issued  to  purchase  and 
develop  the  property. 

One  naturally  turns  to  the  financial  status  of 
the  Australasian  governments  as  indicating 
something  of  the  profit,  or  apparent  profit,  of 
the  various  business  enterprises  undertaken  by 
public  authorities.  In  a  broad  way,  the  credit 
of  those  countries  has  not  been  impaired  by 
their  extensive  borrowing  for  reproductive  un- 
dertakings. At  least  they  are  now  able  to  se- 
cure money  on  better  terms — on  an  average — 
than  at  any  previous  period.  In  1890,  when 
the  public  debt  of  New  Zealand — the  colony 
now  most  committed  to  state  trading — was  in 


274     The  Government  in  Business 

the  neighbourhood  of  $185,000,000,  the  interest 
was  about  4.7  per  cent;  while  in  1905,  with  an 
indebtedness  approaching  $235,000,000,  the 
rate  of  interest  was  a  trifle  over  3.8  per  cent. 
Probably,  also,  a  larger  share  of  the  public  se- 
curities is  held  locally  than  ever  before.  There 
are  several  reasons  why  this  should  be  so.  The 
population  and  the  net  assets  of  both  the  Com- 
monwealth and  New  Zealand  are  increasing, 
those  of  the  latter  country  in  a  remarkable  de- 
gree. During  the  first  five  years  of  the  cen- 
tury even  Australia,  which  suffered  a  large  emi- 
gration during  the  recent  drought,  increased  its 
population  from  3,777,535  to  4,068,789.  Ac- 
cumulated wealth  is  growing — and  at  the  same 
time  its  distribution.  During  twenty  years  the 
proportion  of  persons  dying  in  Australia  who 
have  left  estates  has  risen  twelve  per  cent.  In 
New  Zealand  the  per  capita  private  wealth  has 
increased  $268  within  a  decade.  Furthermore, 
even  in  the  latter  colony,  whose  public  debt  has 
advanced  by  leaps  and  bounds  since  1890,  the 
revenues  have  grown  even  more  rapidly.  Dur- 
ing the  five  years  ending  with  1902,  the  per 


The  Government  in  Business     275 

capita  debt  increased  from  $293  to  $319,  but 
the  proportion  of  the  revenues  absorbed  by  debt 
charges,  including  sinking  fund,  fell  from 
34.28  per  cent,  to  29.8  per  cent. 

In  comparing  the  indebtedness  of  Austra- 
lasia with  that  of  American  communities,  two 
important  reservations  have  to  be  made.  In 
the  first  place,  about  one-half  the  public  debt 
represents  investments  in  railways,  telegraphs, 
land  purchased  for  re-sale  to  settlers,  and 
money  loaned  on  farm  mortgages — all  of 
which,  as  has  been  seen,  returns  some  income, 
and  therefore  is  not  a  dead  weight  on  taxpay- 
ers. In  the  second  place,  a  large  amount  of 
public  indebtedness  that  in  the  United  States  is 
distributed  among  local  bodies,  such  as  cities, 
counties,  and  townships,  in  Australasia  is  part 
of  the  state  or  colonial  debt.  The  expenditures 
for  highways  and  bridges,  court-houses  and 
jails,  school  buildings,  and  even  for  street  rail- 
ways, sewers,  and  water  works,  are  thus  in- 
cluded in  state  obligations.  Part  of  the  state 
debt  consists  of  money  reloaned  to  local  bodies 
— nearly  twelve  million  dollars  of  the  New  Zea- 


276     The  Government  in  Business 

land  debt  is  thus  accounted  for.  Finally,  in 
estimating  the  ability  of  taxpayers  to  carry 
this  burden,  it  must  be  remembered  that  they 
have  to  support  no  national  war  debt,  no  army 
pension  list,  no  heavy  army,  navy,  or  diplomatic 
appropriations.  New  Zealand  has  her  customs 
revenues,  and  the  states  in  Australia  have  a 
share  of  the  federal  customs,  turned  over  to 
them  by  the  Commonwealth  government.  There- 
fore it  is  not  surprising  that  their  budgets  often 
show  a  surplus — that  of  New  South  Wales  ap- 
proaching a  million  pounds  sterling  the  present 
year.  Of  late  New  Zealand  has  regularly  en- 
joyed a  surplus,  that  of  the  last  year  reported 
being  over  half  a  million  dollars — so  that  the 
government  has  accumulated  a  credit  balance, 
from  excess  of  revenue,  of  more  than  $3,500,- 
000,  besides  appropriating  a  portion  of  these 
accumulations  to  public  works.  During  the 
last  fiscal  year  Queensland  had  an  excess  of  rev- 
enues over  expenditures  of  $2,652,790.  West- 
ern Australia  only,  of  the  states  whose  last 
year's  finances  have  been  reported,  shows  a  def- 
icit of  something  less  than  $100,000. 


The  Government  in  Business     277 

In  New  Zealand  the  per  capita  revenue  is 
$41.85,  and  in  the  Commonwealth — taking  an 
average  of  all  the  states — $41.26.  But  only 
$16.62  of  the  former  sum  and  $15.08  of  the  lat- 
ter are  raised  by  taxation,  the  remainder  being 
receipts  from  posts,  telegraphs,  public  lands, 
and  other  sources.  The  direct  taxes,  exclud- 
ing customs,  are  $3.63  per  capita  in  Australia 
and  $5.61  in  New  Zealand.  Local  taxes,  which 
are  not  here  counted,  are  relatively  light,  be- 
cause the  state  pays  directly  for  many  local  ex- 
penses. Therefore  the  people  manage  without 
much  hardship  to  carry  a  public  debt  ranging 
from  $250  per  capita  in  Tasmania  to  nearly 
$400  per  capita  in  Queensland — and  nothing  in 
present  conditions  indicates  that  the  public  fi- 
nances of  the  country  are  not  sound. 

There  is  no  general  sentiment  in  Australasia 
adverse  to  government  ownership  of  railways 
and  telegraphs,  and  very  little  opposition  to  the 
other  enterprises  that  have  been  described. 
They  form  part  of  the  industrial  environment 
in  which  the  people  have  grown  up.  The  state 
coal  mines,  in  New  Zealand,  were  opened  not 


278     The  Government  in  Business 

with  the  idea  of  establishing  a  government  mo- 
nopoly, but  in  order  to  regulate  prices  of  a 
commodity  of  which  the  government  was  a  chief 
consumer.  Some  jealousy  of  this  undertaking 
was  manifested  by  partisans  of  individual  en- 
terprise, in  which  the  principle  of  government 
ownership  was  attacked,  but  this  opposition 
could  hardly  be  said  to  be  a  general  sentiment. 
The  disposition  among  Australasians  is  to 
judge  each  operation  of  the  government  on  its 
individual  merits — and  it  is  rare  to  find  an  or- 
dinary citizen  willing  to  discuss  state  trading  in 
the  abstract,  as  having  any  bearing  on  the  gov- 
ernment industrial  activities  with  which  he  is 
familiar.  Government  ownership,  so  far  as  it 
has  extended,  is  accepted  as  a  matter  of  course 
— and  is  regarded  as  a  debatable  policy  only  in 
relation  to  new  undertakings. 

There  is  always  criticism,  inspired  either  by 
political  motives  or  by  real  dissent  as  to  meth- 
ods, of  the  administration  of  government  in- 
dustrial departments.  This  is  not  to  be 
confounded  with  attacks  upon  government  own- 
ership as  a  policy.  Yet  in  Australia  the  two 


The  Government  in  Business     279 

might  easily  be  confused  by  a  casual  in- 
quirer. There  is  also  growing  up  a  certain 
purely  political  opposition  to  government 
ownership,  especially  in  Australia  itself, 
among  those  who  distrust  the  labour  pro- 
gramme, and  wish  to  draw  a  clear  line  be- 
tween individualism  and  anything  that  even 
looks  toward  socialism.  But  those  who  take 
this  position,  in  their  opposition  to  the  labour 
party,  are  not  yet  a  numerous  contingent  in  the 
larger  body  of  conservatives. 

A  conclusion  reached  by  an  outsider  as  to  the 
utility  of  government  ownership,  from  the  ex- 
perience of  Australasia,  must  be  so  largely 
qualified  as  to  be  almost  negative.  Public 
railways,  telegraphs,  and  land  banks  have  suc- 
ceeded— and  have  responded  to  the  peculiar 
needs  of  the  states  where  they  were  established 
— or  they  would  long  since  have  ceased  to  ex- 
ist. There  has  been  no  exigent  demand  for 
state  life  insurance,  or  the  system  would  surely 
have  extended  beyond  New  Zealand  during  the 
thirty-six  years  it  has  been  in  existence  in  that 
colony.  Private  railways  thrive  in  the  shadow 


280     The  Government  in  Business 

of  preponderating  government  systems.  Pri- 
vate and  public  street  railways  are  operated 
harmoniously  in  the  same  cities,  or  in  neigh- 
bouring towns  and  states,  and  neither  drives  the 
other  from  the  field.  Private  banks  and  sav- 
ings institutions  are  able  to  place  their  funds 
securely  and  profitably  in  spite  of  government 
competition.  South  Australia,  with  a  state 
commission  and  export  department,  has  also 
one  of  the  largest  co-operative  farmers'  commis- 
sion companies  in  the  Commonwealth,  which 
does  a  business  for  its  members  five  times  as 
great  as  that  done  by  the  government,  though 
in  more  varied  lines.  An  outside  observer,  un- 
less a  faddist  on  government  ownership,  would 
probably  come  away  from  Australasia  with  a 
feeling  that,  after  all, this  issue  is  less  important 
— as  affecting  the  social  and  economic  welfare  of 
the  people — than  those  who  theoretically  dis- 
cuss the  subject  suppose.  Government  owner- 
ship does  not  bankrupt  the  state,  deaden  pri- 
vate enterprise,  and  kill  prosperity ;  neither  does 
it  bring  with  a  bump  a  nation  into  an  indus- 
trial millennium. 


CHAPTER  XII 
CONCLUSION  AND  OUTLOOK 

THE  labour  movement  in  Australasia  pre- 
sents two  opposite  aspects.  On  the  one  hand, 
Australasian  workingmen  seek  political  reforms 
because  behind  them  lie  economic  reforms. 
They  use  government  instruments  to  obtain 
wages  and  hours  of  labour  more  favourable 
than  they  can  secure  by  private  agreements. 
The  rank  and  file  of  the  party  hardly  look 
beyond  their  own  day  and  generation — nor  do 
they  theorise  about  the  functions  of  government. 
On  the  other  hand,  many  leaders  of  the  labour 
party,  and  even  a  select  body  of  their  followers, 
are  inspired  by  the  unselfish  idealism  of  reform- 
ers. They  see  in  the  labour  movement  a  phase 
of  a  world-wide  progress  toward  socialism, 
economic  equality,  the  abolition  of  poverty  by 
collective  action,  and  have  a  conscious  theory 
of  social  justice  that  denies  the  validity  of  the 
281 


282       Conclusion  and  Outlook 

present  industrial  system.  When  questioned 
as  to  the  influence  of  this  theory  upon  their 
political  purposes,  they  say  that  socialism  is  an 
aspiration  for  which  society  must  be  prepared 
gradually,  but  which  demands  that  the  govern- 
ment be  administered  in  sympathy  with  the  ideal 
it  proposes. 

This  combined  appeal  to  self-interest  and  sen- 
timent, strengthens,  but  at  the  same  time  limits, 
the  labour  movement.  From  the  ideal  side,  a 
limitation  is  set  by  the  conceivable  fallacy  of 
socialism  itself.  Socialists  make  two  assump- 
tions which  can  be  proved  only  by  experience — 
that  their  conception  of  a  coming  social  state  is 
correct,  and  that  they  can  direct  the  process  by 
which  it  will  be  attained.  The  logic  of  social- 
ism, its  appeal  to  right  and  justice,  do  not 
prove  that  it  is  practicable.  The  problem  of 
collective  production  and  distribution  which 
it  proposes  is  as  unsolved  as  the  navigation 
of  the  air.  Socialism  is  as  yet  a  faith,  but 
not  a  science.  It  has  not  been  experimen- 
tally demonstrated,  and  a  failure  to  prove 
its  claims,  either  at  home  or  abroad,  may  check 


Conclusion  and  Outlook       283 

or  divert  the  course  of  the  labour  movement  in 
Australasia. 

The  practical  projects  of  labour  leaders  en- 
counter the  more  immediate  difficulty  of  har- 
monising individual  and  social  interests,  and 
class  and  public  interests.  The  labour  party 
seeks  legislation  in  behalf  of  a  section  of  the 
community.  Even  among  wage-earners  its 
policy  requires  the  minority  to  make  sacrifices 
for  the  majority.  The  diversity  of  interests 
between  classes  of  producers,  as  between  farm- 
ers and  wage-earners,  also  creates  a  sectional 
sentiment.  The  latter  favour  land  nationalisa- 
tion, because  this  is  in  harmony  with  their 
general  doctrine  of  State  control  of  the  sources 
of  production.  The  farmers  are  sturdy  parti- 
sans of  freehold  tenure  and  the  sale  of  the  State 
domain  to  settlers.  The  wage-earner  is  the 
direct  beneficiary  of  the  minimum  wage;  the 
farmer  pays  the  increment  to  the  cost  of  pro- 
duction resulting  from  laws  and  awards,  di- 
rectly to  his  own  hands,  and  indirectly  in  a 
higher  price  for  commodities.  The  wage-earn- 
ers favour  public  works  as  a  source  of  employ- 


284       Conclusion  and  Outlook 

merit,  the  taxpaying  farmers  as  a  source  of 
revenue.  One  seeks  costly  city  improvements 
for  his  urban  constituents,  the  other  transpor- 
tation and  irrigation  enterprises.  The  small 
landholder  has,  upon  the  whole,  socialist  sym- 
pathies. He  supports  the  existing  system  of 
State  railways  and  telegraphs,  State  aid  to 
settlers  and  a  government  bank,  and  State  trad- 
ing in  agricultural  produce.  He  is  open  to  a 
certain  amount  of  political  bargaining  with 
city  workingmen,  like  them  giving  support  in 
return  for  concessions.  But  he  never  forgets 
his  distinct  class  interests,  which  now  appear 
threatened  by  the  policy  of  the  labourists.  The 
farmers  of  New  Zealand  and  Victoria,  where 
the  rural  classes  are  relatively  the  most  influen- 
tial, have  already  organised  an  active  campaign 
in  opposition  to  the  labour  party. 

The  average  wage-earner,  when  he  becomes  a 
thoroughgoing  socialist,  has  no  ships  to  burn 
behind  him.  Not  only  is  his  material  stake  in 
the  country  small,  but  in  exchanging  private 
for  State  employment  he  sacrifices  no  individual 
freedom.  Independent,  or  self -employ  ing  work- 


Conclusion  and  Outlook       285 

ers,  on  the  other  hand,  usually  have  property 
interests  that  make  them  averse  to  social 
changes;  and  they  have  something  that  they 
probably  value  still  more,  though  it  may  not 
consciously  determine  their  sentiment  on  social 
questions — that  is,  their  power  of  self-direction. 
A  man  who  has  been  his  own  boss,  whether  a 
farmer,  mechanic,  or  merchant,  resents  the 
restraint  of  official  supervision.  This  sentiment 
is  latent,  because  it  lacks  means  for  expression. 
But  it  is  widely  diffused  among  the  more  pros- 
perous working  people  of  Australasia. 

The  labour  party  is  only  one  section  of 
manual  workers ;  but  it  dominates  the  class,  be- 
cause its  members  are  organised  and  have  the 
inspiration  of  a  positive  programme.  They  are 
followers  of  what  is  to  them  a  true  faith.  Their 
leaders  have  the  aggressiveness  and  the  self- 
confidence  of  proselyters.  This  inspires  them 
with  devotion  to  their  cause,  but  prevents  prac- 
tical compromises  at  the  sacrifice  of  abstract 
social  principles. 

The  desire  of  workers  to  give  collective  enter- 
prises good  repute  manifests  itself  in  legisla- 


286       Conclusion  and  Outlook 

tion,  but  not  always  in  industrial  service.  Men 
who  advocate  government  administration  of  in- 
dustry are  not  necessarily  better  employees  of 
the  government.  The  investigating  commis- 
sions of  parliament  have  found  that  public  are 
more  expensive  than  corresponding  private 
undertakings,  and  that  men  do  not  work  as  well 
for  the  State  as  for  private  employers.  Noth- 
ing illustrates  the  last  fact  more  significantly 
than  that  the  usual  term  among  Australasians 
for  an  easy-going  pace  of  working  is  "the  gov- 
ernment stroke." 

Successful  State  socialism  depends  largely 
upon  perfecting  public  control  over  the  individ- 
ual. The  powers  of  government  must  be  ex- 
tended to  correspond  with  its  functions,  even  in 
opposition  to  democratic  principles  which  limit 
government  authority.  Australasian  labour 
leaders,  however,  do  not  proclaim  such  an  inten- 
tion. They  do  not  anticipate  that  the  State 
will  be  made  an  industrial  policeman  the 
moment  it  becomes  an  industrial  director.  Rail- 
way servants  resent  the  control  of  govern- 
ment commissioners  as  much  as  other  workers 


Conclusion  and  Outlook       287 

resent  the  restraints  of  private  employers.  A 
strike  of  public  employees,  in  1903,  tied  up  the 
transportation  of  Victoria.  This  disturbance 
was  accompanied  by  incidents  that  would  have 
rendered  the  strikers  liable  to  penal  punishment 
in  America,  and  would  have  been  discounte- 
nanced by  our  trade  unions.  Trains  were  de- 
serted by  their  crews  wherever  they  chanced  to 
be  when  the  strike  began,  stranding  passengers 
and  perishable  merchandise  in  out  of  the  way 
places,  and  endangering  life  and  property. 
The  public  answered  this  challenge  to  its  au- 
thority by  a  strike  law  more  drastic  than  any 
legislation  ventured  by  Americans  in  the  most 
acute  crises  of  their  civil  war.  This  law  im- 
posed a  penalty  of  nearly  five  hundred  dollars 
or  twelve  months'  imprisonment  for  engaging  in 
a  strike  on  government  railways,  and  made  men 
liable  to  arrest  without  warrant  or  bail  for 
advising  a  strike  orally  or  by  publication,  or 
for  collecting  funds  for  the  support  of  strikers, 
or  for  attending  any  meeting  of  more  than  six 
persons  for  the  purpose  of  encouraging  strikers. 
Almost  automatically  the  responsibilities  of  an 


288       Conclusion  and  Outlook 

employer  were  supported  by  the  powers  of  an 
employer,  re-enforced  by  the  most  comprehen- 
sive police  powers  of  the  State.  This  experi- 
ence shows  to  what  extent  public  control  of 
industry  involves  public  control  of  workers. 
Industrial  service  ceases  to  be  voluntary.  The 
attitude  of  the  individual  employee  towards  his 
task  is  not  determined  by  civic  virtue,  but  by 
a  self-interest  whose  ultimate  motive  is  to  avoid 
positive  pains  and  penalties,  however  disguised 
by  forms  of  procedure.  Workers  will  have  ex- 
changed masters,  not  have  abolished  them. 

The  economic  advantage  of  this  to  the  work- 
ing people  will  depend  upon  the  efficiency  of 
administration.  The  labour  leaders  emphasise 
distribution  at  the  expense  of  production. 
They  reason  that  if  the  wealth  at  present  pro- 
duced were  equitably  apportioned,  poverty  would 
be  abolished.  The  question  of  production  enters 
into  their  calculation  chiefly  when  they  consider 
non -producers,  who  under  the  new  system  would 
be  compelled  to  share  the  burden  of  profitable 
labour.  However,  a  very  slight  percentage  of 
waste,  of  decreased  industrial  efficiency,  of 


Conclusion  and  Outlook       289 

unwise  application  of  public  capital  and  col- 
lective effort  to  production,  might  more  than 
counterbalance  these  advantages,  and  leave  the 
total  economic  condition  of  society  worse  than 
before. 

The  vital  question,  therefore,  is  one  of  man- 
agement. In  no  country  does  ability  to  secure 
office  necessarily  imply  ability  to  administer 
office.  The  man  best  fitted  to  make  State  enter- 
prises pay,  might  be  least  popular  with  his 
employees.  The  latter  would  constitute  a  rela- 
tively small  body  of  men  intensely  interested  in 
opposing  him,  while  the  public  benefiting  by 
his  administrative  ability  would  be  a  good- 
natured  but  inefficient  supporter.  The  experi- 
ence of  democracy,  in  Australasia  as  well  as 
America,  goes  to  show  that  the  personal  interest 
of  a  public  captain  of  industry  would  lie  in 
conciliating  his  employees,  at  the  expense  if 
necessary  of  the  whole  body  of  citizens.  Semi- 
occasionally  there  might  be  a  spasmodic  era  of 
reform,  when  the  public  woke  up  to  find  its 
welfare  seriously  compromised  by  the  conven- 
tional infidelity  of  its  servants ;  but  the  restrain- 


290       Conclusion  and  Outlook 

ing  motive  of  these  crises  would  be  but  tempo- 
rary, while  the  influence  of  the  employees  would 
be  constant  and  insistent. 

The  labour  movement  of  Australasia  is  a 
manifestation  of  national  introspection — a  cen- 
tring inward  of  the  life  of  the  people.  It  has 
nothing  to  do  with  wider  world  interests.  The 
Australasians  are  not  exactly  a  hermit  nation, 
but  they  are  in  some  respects  a  shepherd  nation. 
Remote  from  other  communities  of  their  own 
kindred,  aloof  from  active  contact  with  the 
problems  of  other  countries,  thrown  upon  them- 
selves in  the  isolation  of  the  southern  ocean, 
they  have  pondered  upon  the  phenomena  of 
their  peculiarly  separate  social  existence.  They 
have  a  trifle  of  the  idealism  sometimes  generated 
in  the  solitude  of  the  bush.  They  are  aiming — 
whether  wisely  or  not — at  national  self-perfec- 
tion. The  nation,  like  the  individual,  finds  it 
hard  to  reconcile  this  ideal  purpose  with  prac- 
tical activities.  Immigration,  wholesale  mate- 
rial development,  national  aggrandisement  in  the 
industrial  or  political  world,  are  not  with 
them  matters  of  supreme  concern.  The  labour 


Conclusion  and  Outlook       291 

leaders  seem  almost  to  fear  the  corrupting  in- 
fluence of  too  great  prosperity.  They  do  not 
wish  to  experience  an  expansion  of  wealth  and 
well-being  that  would  reconcile  the  people  of 
the  country  to  what  they  consider  a  vicious 
system  of  social  organisation. 

Like  all  self-centred  movements,  the  labour 
programme  presents  from  an  international 
viewpoint  an  egoistic  aspect.  None  of  that 
altruistic  attitude  toward  the  industrially  op- 
pressed of  Europe,  which  has  been  a  common 
sentiment  in  the  United  States,  has  developed 
among  the  Australasian  populace.  They  nei- 
ther welcome  the  stranger  from  other  lands 
as  a  permanent  resident,  nor  are  inspired  with 
the  enthusiasm  of  an  international  propaganda. 
Protection  and  exclusion  are  the  means  they  ad- 
vocate to  maintain  what  some  of  their  opponents 
call  a  "White  and  Vacant  Australia."  Some- 
thing of  a  Chinese  jealousy  of  the  outside 
world,  of  the  parochial  spirit  extended  to  a  con- 
tinent, conditions  the  labour  movement  and 
weakens  its  moral  basis. 

But  while   the   international   sympathies   of 


292       Conclusion  and  Outlook 

Australasian  socialism  are  limited,  within  the 
confines  of  the  country  its  interests  are  all- 
inclusive.  The  neighbourly  spirit  is  extended 
to  the  entire  people.  The  fraternal  sentiment 
which  is  the  basis  of  trade  unionism  is  promi- 
nent in  the  labour  party,  and  not  wholly  absent 
from  workers  as  a  class.  A  workingman  con- 
tended that  if  he  could  load  ten  tons  of  coal 
a  day  and  a  smaller  comrade  could  load  but  five 
tons,  nevertheless  the  wage  of  the  two  should  be 
equal;  for  they  both  gave  to  their  task  equal 
time  and  effort,  according  to  their  respective 
ability.  Yet  the  socialist  dictum,  "From  every 
man  according  to  his  ability,  to  every  man 
according  to  his  needs,"  is  not  accepted  with- 
out qualification  by  many  labourists,  who  ap- 
preciate the  difficulty  of  applying  this  princi- 
ple to  a  practical  administrative  policy. 

However,  all  Australasian  socialists  regard 
labour  as  a  duty,  and  subsistence  as  a  right,  and 
therefore  deny  that  personal  service  is  to  be 
treated  on  an  economic  basis.  They  do  not  ad- 
mit that  the  evolutionary  process  should  con- 
trol the  economic  adjustments  of  the  individual 


Conclusion  and  Outlook       293 

within  society.  It  should  not  profit  a  man  that 
he  is  stronger,  or  quicker,  or  more  skilful  than 
his  comrade.  His  superior  endowments  as  a 
producer  he  must  share  with  the  weaker  brother. 
Social  progress  is  not  to  be  by  the  selection 
and  survival  of  the  fittest,  but  by  the  collective 
efforts  of  all,  united  in  a  common  lot  and  lim- 
ited to  a  common  rate  of  advance.  The  motive 
of  those  more  fortunately  adapted  by  nature  to 
special  exertion  is  no  longer  to  be  material  wel- 
fare, but  social  and  moral  satisfaction — the 
consciousness  of  adding  to  social  well-being. 
As  the  amount  of  his  salary  does  not  determine 
the  gallantry  of  an  officer  in  the  charge,  or 
the  material  emoluments  of  his  office  the  fidelity 
of  a  statesman  in  his  trust,  so,  it  is  assumed, 
when  the  State  insures  against  dependence  in 
old  age  and  infirmity,  the  wage  of  the  worker 
will  not  determine  his  industry  and  application 
to  the  task  that  will  then  have  become  a  civic 
duty. 

How  far  the  material  gains  of  labour  in  the 
colonies  have  affected  its  economic  condition  is 
not  easy  to  determine;  for  this  must  depend 


294       Conclusion  and  Outlook 

upon  comparisons  with  previous  conditions  in 
Australasia  and  contemporary  conditions  in 
other  countries.  Occasionally  colonial  workers 
are  subject  to  greater  economic  distress — from 
the  point  of  view  of  numbers  affected,  if  not  of 
the  intensity  of  suffering  of  individuals — than 
occurs  in  the  United  States.  According  to 
the  state  inspector  of  charities,  during  the 
year  ending  with  June,  1904,  nearer  one-fifth 
than  one-tenth  of  the  entire  population  of  Vic- 
toria received  charitable  aid  from  either  private 
or  public  sources,  and  over  one-tenth  had  been 
assisted  by  public  institutions.  The  previous 
year,  in  the  midst  of  the  drought,  out  of  1,200,- 
000  inhabitants,  70,540  were  inmates  of  insti- 
tutions, and  114,341  received  outdoor  charita- 
ble relief,  while  11,500  received  old-age  pensions 
from  the  state.  The  Commonwealth  and  New 
Zealand,  with  an  aggregate  population  less  by 
nearly  300,000  people  than  that  of  Illinois, 
spend  annually  about  $13,000,000  upon  public 
charity,  hospitals,  and  old-age  pensions  for 
which  want  of  means  is  a  necessary  qualifica- 
tion. Upon  the  whole,  the  workingman  in  the 


Conclusion  and  Outlook       295 

Comonwealth  and  New  Zealand  is  richer  in 
leisure  but  poorer  in  money  than  the  working- 
men  of  America.  The  wage  per  hour,  at  least 
in  factory  occupations  and  skilled  trades,  is 
lower  in  Australasia  than  in  the  United  States, 
and  on  account  of  the  longer  working  day  in 
the  latter  country,  the  total  earnings  of  work- 
men are  much  larger  than  in  the  colonies.  In 
this  comparison,  the  cost  of  living  is  not  suf- 
ficiently different  to  make  real  wages  vary 
appreciably  from  nominal  wages.  Real  wages 
and  the  standard  of  living  are  rising,  and  are 
now  higher  than  ever  before  in  both  Australia 
and  New  Zealand. 

Australasian  workingmen  show  a  fair  degree 
of  thrift,  but  the  trend  of  small  investment  is 
different  from  that  in  the  United  States.  Sav- 
ings banks  are  frequently  government  institu- 
tions, so  that  deposits  may  be  made  through 
the  post-office,  and  this  convenience  and  security 
make  them  more  popular  than  in  America.  The 
number  of  depositors  is  therefore  three  times  as 
large  in  proportion  to  the  population  as  in  the 
United  States,  though  the  average  deposits  are 


296       Conclusion  and  Outlook 

only  two-fifths  what  they  are  in  the  latter 
country.  The  relatively  larger  city  population 
in  Australia  influences  these  averages.  Home 
investments  appear  to  be  more  common  in 
America,  but  in  the  colonies  there  are  no  sta- 
tistics positively  to  verify  this  surmise. 

A  comparison  of  the  more  elusive  elements  of 
social  welfare  is  still  more  difficult.  The  work- 
ing classes  of  America  and  Australasia  present 
no  marked  differences  in  general  culture.  Such 
figures  as  are  at  hand  indicate  that  the  average 
Australian  or  New  Zealander  spends  a  larger 
share  of  his  income  for  tobacco  and  liquor 
than  the  average  American.  But  crime,  and 
especially  deeds  of  violence,  are  less  common 
than  in  the  United  States.  The  birth  rate  in 
Australia  and  New  Zealand  is  lower  than  in  the 
United  States,  but  the  statistics  of  the  latter 
country  are  too  defective  to  allow  a  comparison 
with  the  birth  rate  of  native  whites  alone.  The 
same  qualification  applies  to  positive  informa- 
tion regarding  illegitimacy — though  there  are 
some  grounds  for  believing  that  children  are 
more  commonly  born  out  of  wedlock  in  the  col- 


Conclusion  and  Outlook       297 

onies  than  in  America,  but  that  divorces  are 
relatively  rarer.  The  most  casual  observation 
shows  that  gambling — especially  betting  on 
horse  races — is  more  common  in  Australasia 
than  in  our  own  country,  and  is  not  viewed 
with  the  same  disfavour  by  public  opinion. 
Nearly  all  classes  of  people  buy  chances  on  the 
principal  turf  events.  Not  only  is  the  use  of 
the  mails  permitted  to  pooling  firms,  but  legal 
enactments  exist  regulating  race-course  gam- 
bling and  giving  official  sanction  to  the  forms 
under  which  it  is  conducted.  What  are  consid- 
ered fraudulent  schemes  or  lotteries  in  the 
United  States,  and  as  such  are  discouraged  by 
law  and  excluded  from  the  use  of  the  mails,  in 
Australasia  are  looked  upon  as  legitimate  busi- 
ness. This  attitude  is  probably  due  in  part  to 
survivals  of  the  speculative  spirit  from  the  gold 
days.  The  extensive  hold  these  forms  of  gam- 
bling have  on  the  community  is  a  misfortune,  but 
it  equally  affects  all  classes,  and  is  not  justly 
attributable  to  the  labour  movement,  or  to  any 
sentiment  or  condition  confined  exclusively  to 
the  working  people. 


298       Conclusion  and  Outlook 

Australasian  workingmen  lack  the  cosmopoli- 
spirit,  that  in  American  workshops  is  con- 
ferred by  rival  nationalities.  Foreigners  have 
brought  the  industrial  wisdom  of  the  entire 
world,  the  benefits  of  European  travel,  and  the 
experience  of  the  Wander jahr  to  American  me- 
chanics— teaching  them  not  only  trade  methods, 
but  also  the  social  and  political  condition  of 
other  countries.  Thus  has  been  created  a  habit 
of  thought,  an  open  attitude  of  mind  towards 
strange  men  and  customs,  that  is  in  itself  an 
element  of  culture.  American  workers  there- 
fore appear  to  have  a  wider  range  of  interest 
and  a  more  inquisitive  spirit  than  Australa- 
sians. But  this  again  is  a  product  of  long- 
standing conditions  quite  independent  of  the  la- 
bour movement. 

Fairly  considered,  no  results  of  the  socialist 
spirit  prevailing  among  the  working  classes  of 
Australasia,  or  of  the  partial  realisation  of 
their  programme  through  legislation — except- 
ing, perhaps,  their  attitude  toward  strikes — 
are  so  obvious  as  to  be  assigned  directly  to  that 
spirit  and  legislation  as  a  cause.  There  is  no 


Conclusion  and  Outlook       299 

evidence  to  show  that  the  average  material  con- 
dition of  the  working  classes  has  been  modified 
as  yet  by  the  laws  enacted  for  them.  The  cor- 
rection of  individual  instances  of  specific  and 
acute  abuse  has  little  observable  effect  when 
distributed  over  the  whole  body  of  workers. 
The  ethical  standards  and  the  culture  of  the 
present  generation  were  determined  prior  to 
the  rise  of  the  labour  party  and  the  spread  of 
socialist  theories  among  the  people.  Employers 
I  give  evidence  to  show  that  the  efficiency  of  wage- 
earners  has  been  lessened  by  their  habit  of 
relying  upon  government  aid  rather  than  their 
own  exertions.  If  this  is  so,  the  general  effect, 
as  covering  all  producers,  has  not  yet  revealed 
itself  in  decreased  production  or  the  statistics 
of  national  wealth. 

Still,  socialist  theories  react  on  the  beliefs  and 
principles  of  the  persons  holding  them,  and  may 
be  gradually  and  imperceptibly  changing  the 
substratum  of  popular  sentiment  and  morals. 
These  theories  set  up  a  new  standard  of  prop- 
erty right.  Their  realisation  would  withdraw 
the  motive  for  thrift  and  accumulation.  They 


300       Conclusion  and  Outlook 

temper  the  incentive  to  industry.  By  centring 
attention  upon  unjust  features  of  the  present 
industrial  system,  and  making  labour  the  badge 
of  a  new  servitude,  they  foster  among  thought- 
less men  an  impression  that  work  is  in  itself 
an  evil.  The  deepest  philosophy  of  socialism  is 
misunderstood  by  those  that  make  it  a  religion 
of  idleness  or  confiscation.  But  the  deepest 
philosophy  of  every  new  movement  is  misunder- 
stood by  a  considerable  portion  of  its  followers. 
Progress  is  partly  built  upon  error.  The 
fallacies  of  the  labour  party  resemble  the 
fallacies  of  those  inventors  who  seek  a  primum 
mobile,  and  fancy  that  by  mechanical  devices 
they  can  create  force  and  achieve  perpetual 
motion.  Wealth  cannot  be  created  by  a  process 
of  administration,  no  legislative  panacea  for 
poverty  exists,  the  laws  behind  production  are 
not  enacted  by  parliament. 

Many  labourists  conceive  society  as  an  all- 
potent  entity,  with  a  magic  horn  of  plenty  upon 
which  individual  members  may  draw  without 
limit;  vastly  overestimate  the  effect  on  the 
economic  condition  of  the  masses,  of  the  con- 


Conclusion  and  Outlook       301 

centration  of  capital  in  the  hands  of  private 
administrators,  and  the  benefits  that  would 
ensue  to  the  latter  if  profits  were  added  to 
wages ;  and  assume  that  classes  at  present 
idle  would  produce  a  large  share  of  the  wealth 
of  the  anticipated  socialist  state.  This  rea- 
soning inclines  workers  to  believe  the  industrial 
service  they  render  society  either  unnecessary 
or  unjust.  Conceiving  themselves  as  members 
of  a  class  rather  than  of  the  community,  they 
accept  the  status  of  workers  as  permanent,  and 
do  not  aspire  or  strive  to  leave  that  class  with 
the  same  ardour  that  they  would  if  they  ac- 
cepted the  present  state  of  society  as  just  or 
final.  To  become  an  employer  would  be  to 
desert  their  cause,  and  to  cast  their  lot  with  an 
enemy  over  whom  they  anticipate  victory.  The 
industrially  ambitious  worker  runs  counter  to 
the  general  opinion  of  his  associates,  and  can 
better  his  status  only  by  incurring  the  odium  of 
a  traitor  to  his  class. 

This  class  consciousness,  so  much  more  evi- 
dent in  Australasia  than  in  America,  is  a  cause 
rather  than  a  consequence  of  the  labour  move- 


302       Conclusion  and  Outlook 

ment.  Race  solidarity,  the  predominance  of 
the  unskilled  over  skilled  occupations  and  of 
employing  over  independent  industries,  the 
minor  importance  of  the  small  farmer,  either 
as  a  worker  or  as  a  recruit  in  the  urban  labour 
market,  have  all  contributed  to  produce  this 
result.  But  the  labour  movement,  instead  of 
dissolving  class  distinctions,  has  fixed  them  in 
the  very  structure  of  the  government.  It  is 
here  that  the  socialism  of  Australasia  parts 
company  with  democracy ;  for  the  essence  of 
the  latter  is  equality  of  opportunity  for  all — 
which  implies  absolute  self-direction  and  conse- 
quently the  utmost  diversity  of  careers  and  ac- 
complishments— while  the  essence  of  socialism 
is  equal  attainment  for  all,  which  imposes  uni- 
formity of  condition,  and  re-establishes  in  a 
degree  the  institution  of  status. 

The  most  impressive  feature  of  the  growth 
of  socialist-labour  sentiment  in  Australasia  lies 
not  so  much  in  its  character  as  a  local  phenome- 
non, as  in  its  striking  identity  with  the  evolution 
of  similar  ideals  in  other  countries.  The  signifi- 
cance of  this  identity  is  the  greater  because 


Conclusion  and  Outlook       303 

New  Zealand  and  Australia  are  geographically 
remote,  industrially  distinct,  and  politically 
and  socially  widely  different  from  those  older 
lands  of  Europe  where  socialism  had  its  birth 
and  maintains  its  present  stronghold.  No  im- 
portant current  of  influence  plays  back  and 
forth  between  the  colonies  and  England.  Great 
Britain  is  a  tardy  follower  rather  than  a  leader 
in  these  doctrines.  Independently  Australasia 
has  worked  out  a  programme  of  social  reform 
coinciding  in  principle,  and  to  a  great  extent 
in  detail,  with  that  of  European  propagandists. 
The  political  features  of  this  movement  are 
as  suggestive  as  the  purely  economic  features, 
because  they  respond  to  an  even  greater  variety 
of  conditions.  In  all  modern  countries,  the  in- 
dustrial system  is  practically  uniform,  and  the 
wage-earner  stands  in  the  same  relation  to 
the  employer.  But  political  systems  present 
the  widest  diversity.  Nevertheless  the  political 
programme  of  the  German,  French,  Italian,  and 
Spanish  socialist  is  essentially  the  same  as  that 
of  the  Australasian  labourist.  One  would  abol- 
ish royalty,  the  other  royal  governors;  the 


304       Conclusion  and  Outlook 

European  would  do  away  with  a  privileged 
upper  house,  and  so  would  his  Australasian 
confrere.  All  support  the  referendum.  The 
principle  of  party  loyalty  and  mass  control  of 
representatives  is  equally  realised  in  the  or- 
ganisation of  the  social-democratic  party  in 
Germany  and  the  labour  party  in  Australia. 
No  qualified  democracy  will  satisfy  the  ends  of 
the  new  movement.  It  demands  the  extreme  of 
popular  government,  both  in  the  constitutional 
and  in  the  voluntary  organs  through  which  it 
expresses  its  will. 

Colonial  labour  leaders  and  continental  so- 
cialists both  challenge  the  justice  of  the  pres- 
ent industrial  system,  and  demand  the  abolition 
of  the  wage  relation  so  far  as  it  treats  labour  as 
a  commodity  subject  to  ordinary  market  con- 
ditions of  demand  and  supply.  Both  regard 
progress  towards  socialism  as  an  evolutionary 
rather  than  a  revolutionary  process.  But  they 
do  not  use  the  same  means  to  attain  their  pur- 
pose. Australasians  possess  that  phase  of 
British  political  genius  which  enables  them  to 
secure  public  ends  by  involved  processes.  Their 


Conclusion  and  Outlook       305 

leaders  have  adapted  rather  than  abolished 
existing  institutions  and  have  seized  upon  the 
old  organic  forms  of  social  and  political  life  to 
serve  their  ends.  By  a  sort  of  legislative  acci- 
dent the  labour  party  has  discovered  in  compul- 
sory arbitration  a  way  to  realise  State  control 
of  industry.  Employing  the  analogies  of  a 
court,  and  corporation  law,  and  judicial  pro- 
cedure, it  has  created  machinery  by  which  the 
government  administers  private  business. 

However,  the  masses  have  not  followed  their 
leaders  in  Australasia  as  closely  as  in  Europe. 
Most  voters  as  yet  support  practical  projects 
leading  to  socialism  rather  than  the  doctrine 
these  projects  imply.  But  every  measure  they 
secure  commits  them  still  further  to  the  logical 
theory  behind  the  law.  Like  a  man  whose  capi- 
tal has  become  involved  in  expanding  enter- 
prises, each  new  investment  requires  another  to 
support  it.  The  popular  attitude  toward  indi- 
vidual laws  becomes  later  an  endorsement  of  a 
settled  policy,  and  finally  the  acceptance  of  a 
new  social  doctrine. 

An  American  has  fair  reason  to  ask  why  a 


306       Conclusion  and  Outlook 

movement  so  universal,  and  so  strongly  mani- 
fested in  a  nation  akin  in  race  and  institutions 
to  our  own,  and  with  so  similar  a  natural  en- 
vironment, should  not  have  made  its  appear- 
ance as  an  important  influence  in  the  national 
life  of  the  United  States.  Probably  it  has 
been  retarded,  rather  than  averted,  by  condi- 
tions that  have  been  partly  touched  upon  in 
previous  chapters.  No  urgent  demand  for  con- 
stitutional changes  has  secured  wide  popular 
support  among  us,  so  as  to  enlist  the  co-opera- 
tion of  democratic  forces  in  a  mixed  policy  of 
social  and  political  reform.  Our  large  land- 
holding  and  farming  population  controls  the 
government,  and  arrays  us  against  consistent 
socialism — although  it  may  be  no  check  upon 
practical  measures  of  socialistic  import.  The 
comparative  absence  of  bureaucracy  in  public 
administration,  the  diffusion  of  political  au- 
thority among  a  vast  number  of  petty  elective 
officers,  the  intricacy  of  our  governmental  sys- 
tem, the  careful  provision  made  for  the  protec- 
tion of  local  authority,  and  the  popular  jeal- 
ousy of  any  encroachment  upon  the  rights  of 


Conclusion  and  Outlook       307 

local  government,  all  create  conditions  unfa- 
vourable to  public  control  of  industry.  By 
natural  selection  and  temperament,  our  people 
are  individualists.  A  very  large  majority  of 
them  have  no  class  consciousness.  They  do  not 
possess  the  socialist  sentiment,  and  when  they 
advocate  what  might  in  other  countries  be  con- 
sidered socialist  legislation,  it  is  with  a  view  to 
protecting  rather  than  to  restricting  the  sphere 
of  their  own  individual  enterprise. 

The  variation  of  wages  and  marked  economic 
diversity  in  the  condition  of  workers  in  the 
United  States,  and  the  democratic  spirit  in 
which  industrial  administration  is  conducted, 
by  multiplying  stratification  among  employees, 
and  making  the  difference  between  many  of  the 
latter  and  employers  less  than  that  between 
employees  among  themselves,  have  given  an  in- 
dividualist character  to  our  labour  movement. 
Not  class  interests,  but  trade  interests  or  group 
interests,  constitute  the  motive  of  that  move- 
ment. 

America  illustrates  the  fact  that  the  indus- 
trial justification  of  socialism,  according  to  its 


308       Conclusion  and  Outlook 

theoretical  exponents,  is  not  self -demonstrative 
to  a  nation.  According  to  these  advocates, 
socialism  is  an  outgrowth  of  industrial  condi- 
tions that  have  possibly  reached  their  maximum 
development  in  the  United  States.  Nowhere 
else  are  methods  of  production  more  modern. 
Machinery  is  utilised  to  the  greatest  possible 
extent,  capital  is  aggregated  in  immense  ac- 
cumulations for  specific  purposes,  the  control 
of  industries  is  highly  centralised,  the  worker 
is  individually  impotent  before  the  stupendous 
organism  of  material  wealth,  presided  over  by 
perfected  and  intelligent  administration,  which 
he  must  serve.  Yet  this  condition  has  not  yet 
appealed  to  American  workingmen  as  a  body  in 
such  a  way  as  to  commit  them  to  socialism. 
They  have  met  organisation  with  organisation, 
perfected  administration  with  perfected  admin- 
istration, and  have  depended  upon  their  own 
strength  to  cope  with  the  strength  of  their  em- 
ployers. 

This  is  the  record  of  conditions  and  policies 
of  the  past  and  present.  But  the  socialist  sen- 
timent may  grow  rapidly  in  the  future.  Hith- 


Conclusion  and  Outlook       309 

erto  the  radical  as  well  as  the  conservative  citi- 
zen has  been  found  among  the  farmers.  The 
mainstay  of  rock-ribbed  republicanism  and  the 
stronghold  of  socialistic  populism  have  been 
equally  in  rural  communities.  But  now  social- 
ist doctrines  are  permeating  the  conservative 
organisations  of  workingmen.  The  propaga- 
tion of  these  doctrines  has  been  retarded  by 
inefficient  organisation.  Inaugurated  among 
foreigners,  who  lack  a  quick  grasp  of  our 
national  characteristics,  misapprehend  local 
conditions,  and  are  untrained  in  compromise, 
faction  and  personal  divisions  have  helped  to 
make  the  socialist  movement  a  negligible  factor 
in  our  political  life.  We  are  not  a  nation  of 
theorists.  No  doctrinaire  programme  will 
ever  appeal  to  our  people  with  sufficient  force 
to  accomplish  an  industrial  revolution.  Any 
socialism  a  large  section  of  the  nation  accepts, 
will  be  American.  We  shall  probably  arrive  at 
it,  if  at  all,  in  much  the  same  way  as  the  Aus- 
tralasians, by  adopting  one  law  after  another, 
each  for  a  particular  purpose,  modifying  our 
conception  of  government  with  the  exigencies 


310       Conclusion  and  Outlook 

of  practical  legislation,  and  thus  by  attempting 
to  remedy  specific  social  evils  come  to  accept  a 
theory  of  treatment. 

Socialists  are  said  to  aspire  to  control  the 
trade  unions  of  America  by  gradual  propa- 
ganda among  their  members,  not  by  supplanting 
them  with  rival  organisations.  This  means  a 
conflict  of  methods  in  the  labour  movement, 
and  keen  criticism  of  their  respective  results. 
Every  unsuccessful  strike  will  be  an  argument 
for  the  socialist.  Every  legislative  privilege 
to  an  employer,  or  refusal  of  laws  for  the  pro- 
tection of  employees,  will  be  cited  as  a  reason 
why  organised  labour  should  enter  politics. 
The  corporation  lobbyist  will  be  the  involuntary 
but  forceful  advocate  of  socialism.  The  in- 
creasing publicity  of  industrial  methods  will 
furnish  material  for  this  propaganda.  The 
evils  affecting  workers  that  strikes  and  collect- 
ive bargains  cannot  remedy,  will  be  called 
prominently  to  the  attention  of  trade  unionists. 
Socialists  aim  to  show  the  inefficiency  of  past 
methods  and  remedies,  and  they  have  the  im- 
mense advantage  of  all  destructive  critics. 


Conclusion  and  Outlook       3 1 1 

They  are  not  called  upon  to  justify  their  own 
theories  by  practical  results  obviously  beyond 
their  reach,  but  they  will  be  heard  when  they 
point  to  the  lengthening  list  of  partial  failures 
that  mark  the  path  of  their  opponents.  Sooner 
or  later  we  are  likely  to  experience  some  crisis 
like  that  which  accompanied  the  maritime 
strike  in  Australasia.  This  will  bring  to  the 
test  the  faith  of  workers  in  their  present  or- 
ganisation. No  power  in  society  is  strong 
enough  to  stop  the  progressive  betterment  of 
labour.  If  workers  fail  to  accomplish  their 
object  by  one  means,  they  will  try  another. 

If  organised  labour  enters  politics,  constitu- 
tional as  well  as  industrial  changes  may  result. 
A  labour  party  upon  a  trade  union  basis  would 
recover  something  of  the  town  meeting  spirit. 
Methods  of  nomination  would  probably  change, 
and  voters  would  control  their  delegates  more 
strictly.  The  relation  of  the  federal  to  the 
state  governments  would  be  modified  by  a  strong 
socialist  party,  in  order  that  the  central  au- 
thority might  more  effectively  control  large 
corporations  and  industries.  A  labour  party, 


312       Conclusion  and  Outlook 

therefore,  would  probably  adopt  a  loose  con- 
struction policy.  Urban  workers  would  have  to 
compromise  government  ownership  in  its  appli- 
cation to  the  land  question,  in  order  to  concili- 
ate our  predominant  rural  population.  Possi- 
bly they  would  content  themselves  with  limiting 
the  size  of  farms,  or  enforcing  a  system  of 
graduated  taxes  that  would  make  large  or  idle 
holdings  unprofitable. 

Probably  the  persons  least  able  to  gauge  the 
force  and  direction  of  present  tendencies  in  the 
United  States  are  the  radical  socialist  and  the 
ultra-conservative  employer,  placid  by  virtue  of 
his  social  obtusity.  The  former  sees  in  America 
the  same  conditions  that  prevail  in  other  lands. 
The  European-bred  agitator  underestimates 
the  tenacious  conservatism  of  our  Anglo-Saxon 
prejudices.  Many  anti-socialist  conditions  in 
the  United  States  are  organic  and  temperamen- 
tal. They  have  been  bred  into  our  institutions 
from  the  lifeblood  of  the  pioneer,  and  selected 
and  fostered  by  the  whole  course  of  our  national 
history.  No  emotional  crusade  is  likely  to  over- 
throw them.  Socialism  can  succeed  only  by 


Conclusion  and  Outlook       3 1 3 

enlisting  the  individualism  of  Americans.  If 
these  theories  ever  prevail,  it  will  be  because 
they  protect  rather  than  repress  the  self -direc- 
tion of  the  individual.  Socialism  will  hardly  be 
the  original  purpose  of  the  practical  measures 
by  which  that  object  may  finally  be  attained. 
Therefore  the  man  who  is  already  a  socialist  in 
America  is  usually  by  habit  of  thought  out  of 
sympathy  with  popular  sentiment,  and  so  in- 
capable of  appreciating  the  true  value  of  the 
forces  that  shape  our  national  destiny. 

On  the  other  hand,  the  practical  and  philis- 
tine  politician  or  employer,  whose  thoughts  flow 
unchangingly  through  the  petrified  channels  of 
his  mind,  fails  equally  to  grasp  the  significance 
and  possibilities  of  the  history  that  is  being 
made  around  him.  He  reasons  into  the  future 
solely  from  the  past,  and  assumes  the  perma- 
nency of  the  status  quo.  The  bases  of  society 
are  to  him  geologic,  and  its  changes  secular. 
No  enlightenment  dawns  upon  him  from  the  ex- 
perience of  kindred  people,  and  if  he  anticipates 
new  conditions,  which  to  him  must  be  evil,  it  is 
to  meet  them  by  antiquated  tactics  of  industrial 


314       Conclusion  and  Outlook 

and  political  warfare.  He  does  not  see  that  the 
real  conflict  is  a  conflict  of  ideas.  No  matter 
how  many  strikes  he  wins,  each  one  is  a  Pyrrhic 
victory  if  it  changes  the  men  who  may  be  his 
opponents  on  a  temporary  issue,  but  his  allies 
in  a  greater  contest,  into  permanent  adversa- 
ries in  the  ranks  of  socialism.  Such  employers 
are  the  negroes  on  the  safety  valve,  who  raise 
the  pressure  of  resisting  social  forces  to  the 
danger  pitch. 

Those  who  wisely  defend  the  present  social 
system  will  be  people  who  see  the  imminence  of 
possible  change  in  that  system,  or  at  least  of 
a  strong  effort  at  radical  innovation.  So  far 
as  lies  in  their  power  they  will  keep  open  the 
paths  of  social  progress.  They  will  weaken  the 
force  of  the  attack  upon  our  fundamental  in- 
stitutions, by  enlisting  in  their  own  ranks 
many  who  might  be  enrolled  among  their  op- 
ponents. They  will  recognise  that  those  institu- 
tions can  stand  only  so  long  as  they  satisfy  the 
reasonable  demands  of  all  classes  for  social 
betterment.  The  privileges  and  well-being  of 
the  worker  of  to-morrow  cannot  be  scaled  to 


Conclusion  and  Outlook       3 1 5 

the  standard  of  to-day.  A  glance  at  the  past 
century  of  industrial  history  teaches  this  to 
every  observer.  If  existing  institutions  respond 
adequately  to  each  new  adjustment  of  class 
relations,  they  will  probably  stand  unmodified; 
but  if  they  fail  to  do  so,  we  shall  doubtless  ex- 
periment with  other  institutions,  designed  to 
accommodate  themselves  more  flexibly  to  a  wid- 
ening distribution  of  industrial  control  and 
emolument. 

Australasia  has  been  able  to  concentrate  al- 
most undivided  attention  upon  industrial  legis- 
lation because  the  imperial  government  relieves 
the  colonies  of  a  foreign  policy.  Even  com- 
merce with  other  nations  is  of  minor  importance, 
for  exports  go  mostly  to  the  mother  country. 
Such  a  condition  cannot  occur  in  the  United 
States,  where  international  responsibilities  will 
always  share  in  shaping  public  opinion.  But 
such  inferences  as  we  can  draw  from  Australia 
indicate  that  a  labour  party  in  America  would 
be  anti-imperialist,  favourable  to  limiting  world 
activities,  that  full  attention  might  be  devoted 
to  internal  questions. 


3  1 6       Conclusion  and  Outlook 

Socialism  can  hardly  prevail  in  the  United 
States  without  a  revolution  in  the  dominant  in- 
terests of  the  nation.  We  have  centred  our 
energies  as  a  people  upon  problems  of  produc- 
tion. Our  undeveloped  natural  resources  have 
acted  upon  the  nation  like  a  chemical  reagent, 
making  each  man  seek  to  externalise  himself  in 
material  nature.  The  pioneer,  conceiving  the 
rough  forest  as  undulating  meadow  and  waving 
grain,  set  forth  his  energies  to  realise  that  ideal. 
His  neighbour  did  the  same,  until  a  thousand 
pioneers,  each  working  toward  his  individual 
end,  created  a  contagion  of  productive  activity. 
The  popular  faith  has  been  that  every  man 
should  work  out  his  own  economic  salvation,  and 
that  the  welfare  of  the  community  was  in  direct 
ratio  to  the  energy  of  its  members.  The  intense 
pursuit  of  material  welfare  through  self-di- 
rection and  individual  exertion  has,  therefore, 
become  a  national  trait  of  Americans.  They 
have  exalted  production  alone,  assuming  that 
if  enough  were  produced  for  all,  all  would  have 
enough. 

This  sentiment  is  due  to  the  predominance  of 


Conclusion  and  Outlook       317 

independent  producers  among  the  working 
population,  and  the  conditions  that  have  fos- 
tered it  may  in  time  lose  their  present  impor- 
tance. The  experience  of  Australasia  suggests 
that  it  is  not  the  degree  to  which  the  primary 
wealth  of  a  country  is  developed,  but  the  extent 
to  which  it  remains  within  reach  of  the  people, 
that  determines  the  popular  attitude  towards 
questions  of  production  and  distribution.  Our 
natural  resources,  though  as  yet  hardly  touched 
for  development,  are  rapidly  being  appropri- 
ated. As  the  heritage  of  the  nation  becomes 
private  property,  the  class  definitely  excluded 
from  this  patrimony  multiplies  in  an  increasing 
ratio.  These  industrial  aliens  have  no  personal 
interest  in  production  except  as  a  condition  of 
receiving  wages.  The  incentive  to  work  is  less- 
ened, because  the  product  of  extra  exertion  is 
not  so  obviously  as  before  a  direct  benefit  to 
the  labourer.  Therefore  the  growing  body  of 
wage-producers  turns  its  attention  to  ques- 
tions of  distribution.  To  these  the  great  evil 
is,  not  that  too  little  wealth  is  produced,  but 
that  it  is  not  equitably  shared.  Consciously 


3 1 8       Conclusion  and  Outlook 

predestined  to  a  propertyless  state,  they  be- 
come socially  introspective.  If  they  seek  relief 
through  political  action,  the  result  will  neces- 
sarily be  some  form  of  socialism. 

Every  social  movement  results  in  compromise. 
Action  and  reaction  compensate  each  other  as 
truly  in  politics  as  in  physics.  While  the  la- 
bour movement  in  Australasia  will  certainly 
attain  its  material  ends,  it  may  not  realise  in 
practice  its  socialist  ideals.  The  people  have 
advanced  more  rapidly  in  legislation  than  in 
doctrine.  But  no  error  could  be  more  pernicious 
than  to  assume  that  these  laws  have  fully  jus- 
tified themselves  by  economic  and  social  results. 
They  represent  progress,  but  not  a  final  solution 
of  the  problems  they  were  devised  to  meet. 
The  coming  story  of  the  labour  party  will  re- 
cord failure  as  well  as  success,  and  its  adversa- 
ries will  share  in  the  duty  of  shaping  future 
policies  of  the  government.  Nevertheless  la- 
bour has  won  to  its  main  proposals  the  support 
of  all  political  parties,  and  of  the  great  mass  of 
the  people.  No  party  now  opposes  compulsory 
arbitration  or  old-age  pensions.  More  impor- 


Conclusion  and  Outlook       3 1 9 

tant  still,  the  labour  party  has  become  a  vehicle 
to  express  the  aspirations  of  the  working  people, 
and  an  instrument  through  which  they  hope  to 
realise  their  ends.  It  is  a  law-abiding  agency, 
and  the  forces  that  in  other  countries  threaten 
to  disrupt  society,  in  Australasia  serve  only  to 
strengthen  social  bonds. 


THE    END 


INDEX 


Administration  of  state  in- 
dustries, why  difficult, 
289. 

Apprenticeship,  regulated 
by  wage  boards,  143; 
regulated  by  courts  of 
arbitration,  172. 

Arbitration,  see  Compul- 
sory arbitration. 

Arbitration  court,  see  Court 
of  arbitration. 

Arbitration,  voluntary,  a 
failure  in  New  South 
Wales,  156. 

Australia,  climate,  4,  6; 
natural  resources,  7;  dis- 
tribution of  population 
in,  3-6;  topography,  2. 

Awards  and  collective  bar- 
gains compared,  223. 

Award  errors,  220,  223. 

Birth  rate,  296. 
Bureaucracy,          promotes 
governmentalism,  43. 

Cabinetmakers,  wages  of, 
147. 


Centralised  government  in 
Australia,  44. 

Chinese,  evade  industrial 
regulation,  125. 

Chinese  immigration,  123. 

Christchurch  settlers,  23. 

Class  consciousness  in  Aus- 
tralasia, 301. 

Coloured  British  subjects, 
excluded  from  Common- 
wealth, 126. 

Common  rule,  196,  226. 

Compulsory  arbitration, 
centralises  industry,  226; 
causes  slow  workers  to 
open  attic  shops,  232;  eco- 
nomic influence  on  labour 
conditions  limited,  234, 
238;  evolution  of  public 
opinion  regarding,  205 ; 
and  exports,  233-234;  his- 
tory of,  in  Australasia, 
154-157;  increases  con- 
trol of  workers  over  in- 
dustry, 242;  increases 
cost  of  living,  236;  not 
equally  effective  in  all  in- 


321 


322 


Index 


dustries,  234-235;  philo- 
sophical justification  of, 
213;  strikes  lessened  by, 
239;  and  the  tariff,  94; 
and  uniform  wage  rates, 
228-229;  unsettles  busi- 
ness conditions,  224-225. 

Compulsory  arbitration 
law,  proposed  amend- 
ment in  New  South 
Wales,  166;  a  form  of 
corporation  law,  182;  the 
federal,  163;  not  initiated 
by  workingmen,  158. 

Compulsory  resumption  of 
large  estates,  106-107. 

Conciliation  boards,  161 ;  in 
the  evolution  of  arbitra- 
tion laws,  206;  powers 
of,  164;  unsuccessful, 
161. 

Constitution,  does  not  limit 
authority  of  legislature, 
140,  204;  the  federal 
and  industrial  legislation, 
112. 

Constitutional  government 
in  Australasia,  38-39. 

Contract  and  industrial 
regulation  antagonistic, 
199. 

Contract  labour  excluded, 
117. 

Contract  of  sale  defeats 
compulsory  arbitration, 
198. 


Contract  of  service,  cur- 
tailed by  compulsory 
arbitration,  193-195;  nec- 
essary to  make  parties 
subject  to  jurisdiction  of 
arbitration  court,  197. 

Convicts,  see  Penal  settle- 
ment. 

Coolies  in  Queensland, 
abuses  in  recruiting,  128. 

Cosmopolitan  spirit,  lack- 
ing in  Australasia,  298. 

Court  of  arbitration,  con- 
gestion of  business  be- 
fore, 188;  expanding 
functions  of,  208-210;  ex- 
tensive jurisdiction  of, 
169;  intensive  jurisdic- 
tion of,  170;  jurisdiction 
—how  denned,  168;  legis- 
lative functions  of,  184; 
organisation  of,  161-162; 
organisation  criticised, 
221-222;  powers  of,  167; 
public  criticism  of,  186; 
registrar  of,  162;  regu- 
lates conduct  of  business, 
177-178;  a  representative 
body,  184;  sympathetic 
with  labour  demands, 
241 ;  unites  legislative 
and  judicial  power,  185- 
187. 

Court  of  industrial  ap- 
peals, 146. 

Crime,  296. 


Index 


323 


Droughts,     economic     and 

social  effects  of,  56. 
Dunedin  settlers,  22. 

Education,  41. 

Eight  hour  day,  not  re- 
sult of  modern  labour 
movement,  55. 

Employers,  oppose  indus- 
trial regulation,  212. 

Exports,  from  New  Zea- 
land, 216;  from  Victoria, 

2ia 

Factory  laws,  110. 
Farmers  and  workingmen, 

283-284. 
Foreign    policies,    freedom 

of  Australasia  from,  315. 

Gambling,  29T. 

Government  coal  mines  in 
New  Zealand,  273. 

Government  insurance  in 
New  Zealand,  271-272. 

Government  ownership, 
conditions  favouring  in 
Australasia,  247-248; 
limits  of,  246;  not  gov- 
ernment monopoly,  280; 
public  sentiment  regard- 
ing, 277. 

Government  railways,  acci- 
dents, 252;  average  haul, 
253;  cost  per  mile,  258; 
finances  of,  261;  freight 
rates,  254;  freight  traf- 


fic, density  of,  253; 
gauges,  250,  253;  inter- 
est upon  investment,  260; 
labour  conditions  on, 
256;  operating  expenses 
and  earnings,  258;  pas- 
senger fares,  251;  pref- 
erence to  large  shippers, 
255;  public  services  per- 
formed by,  259;  unique 
conditions  attending  op- 
eration, 250. 
Government  stroke,  286. 

Henry  George,  61,  119. 

History  of  social  move- 
ments in  Australasia  and 
the  United  States  com- 
pared, 46. 

Industrial  agreements,  163, 
165,  193,  196. 

Industrial  arbitration,  see 
Compulsory  arbitration. 

Industrial  unions,  see 
Unions. 

Immigration  assisted,  eco- 
nomic effect  of,  33;  ex- 
tent of,  34;  social  effect 
of,  35. 

Imperial  relations,  labour 
attitude  toward,  116. 

Intro-imperial  exclusion, 
126. 

Japanese,  126. 


324 


Index 


Kanakas,  128,  131. 

Kingston,  Right  Honour- 
able Charles,  author  of 
compulsory  arbitration  in 
Australasia,  155;  quoted 
in  relation  to  law,  182. 

Knights  of  Labour  in 
Australasia,  119. 

Labour  cabinets,  96. 

Labour  movement,  indus- 
trial ideals  and  political 
methods,  304;  political 
ideals,  303;  similar  in  all 
countries,  302. 

Labour  party,  financial  ad- 
ministration, 86;  and 
federation,  90 ;  loose  con- 
structionist,  93;  controls 
candidates,  77 ;  method 
of  nomination,  85;  or- 
ganisation, 78,  81,  83. 

Labour  platform,  history 
of,  88;  constitutional  re- 
forms, 101-102;  indus- 
trial reforms,  103; 
planks  of  fighting  plat- 
form, 111. 

Land  ownership,  29. 

Lands,  public;  how  first 
granted,  25;  and  immi- 
gration, 32;  large  estates 
created  from,  26;  na- 
tionalisation of,  108; 
railways  and,  28;  squat- 
ters oppose  settlement 


of,  27;  reforms  sought 
by  labour  party  in  ad- 
ministration of,  106-107. 

Maritime  strike,  61-62. 

Melbourne,  municipal  own- 
ership in,  249. 

Minimum  wage,  see  Wage. 

Municipal  ownership,  not 
extensive  in  Australasia, 
248. 

Municipal  traction,  248; 
accidents,  264;  cost  of, 
265;  fares  and  service, 
263;  profits,  265. 

Nationalisation  of  monop- 
olies, 115. 

New  South  Wales,  political 
labour  party  in,  73. 

New  Zealand,  description 
of,  10;  natural  resources, 
12;  political  labour  move- 
ment, 98-99. 

Occupations  of  the  people 
in  Australasia  and  the 
United  States,  48. 

Occupations  represented  in 
the  political  labour  move- 
ment, 49. 

Old-age  pensions,   113-114. 

Party  history  in  England 
and  the  United  States, 
78-79. 


Index 


325 


Penal  settlement,  17;  auto- 
cratic administration  of, 
18;  character  of  con- 
victs, 17;  economic  influ- 
ence of  convicts,  17; 
influence  on  present 
population,  19;  reaction 
from,  20. 

Police  power  of  govern- 
ment, and  strike  preven- 
tion, 189. 

Political  labour  movement, 
causes  and  origin,  59,  60, 
68,  71,  72. 

Prices,  demand  that  gov- 
ernment regulate,  236 ; 
rising  prices  a  tax  on  all 
labour,  237. 

Production  per  capita  in 
Australasia  and  the 
United  States,  54. 

Profits,  regulated  by  court 
of  arbitration,  180. 

Progressive  party  in  New 
Zealand,  98. 

Public  charities,  cost  and 
number  dependent  on, 
294. 

Public  finances  of  Austra- 
lasia, 273-277. 

Public  industries,  attitude 
of  employees  toward,  38. 

Public  trustee  in  New  Zea- 
land, 272. 

Public  works,  why  under- 
taken by  government,  37. 


Queensland,  climate  and 
topography,  130;  see 
Sugar,  Kanakas,  Coolies. 

Race  limitations  of  social- 
ism, 135. 

Reeves,  Hon.  W.  P.,  intro- 
duces arbitration  act  in 
New  Zealand,  156. 

Savings  banks  deposits  in 
Australasia  and  the 
United  States,  295. 

Sheep  raising,  why  profit- 
able, 24. 

Slow  workers,  231. 

Slow  workers  and  immigra- 
tion, 232. 

Socialism,  doctrinaire  in 
Australasia,  118;  race 
limitations  of,  135. 

Socialist  ideals  of  the  la- 
bour party,  119,  281-282. 

Socialist  propaganda  in  the 
United  States,  310. 

Socialist  tendencies  re- 
tarded in  America,  306- 
309. 

Squatters,  25. 

State  aid  to  settlers,  266- 
268. 

State  batteries,  271. 

State  socialism  and  com- 
pulsory arbitration,  243- 
244. 

State  trading  in  farm 
produce,  269-270. 


326 


Index 


Strike,  dock,  in  London,  60 ; 
in  defiance  of  court  of 
arbitration,  239;  lessened 
by  compulsory  arbitra- 
tion, 240;  of  miners  and 
shearers,  62-63;  of  rail- 
way employees  in  Vic- 
toria, 287. 

Strike  law  in  Victoria,  287. 

Strikes  and  lockouts,  de- 
fined, 193;  evolution  of 
preventive  legislation, 
189-192;  not  prohibited 
in  New  Zealand,  189; 
prohibited  in  Austra- 
lasia, 191-192. 

Suffrage  laws,  40. 

Sugar  industry,  in  Queens- 
land, 127,  129;  state  aid 
for,  128,  269;  protected 
by  tariff  and  bounties, 
131. 

Sweating,  in  Victoria,  138. 

Sydney,  building  statistics, 
219;  first  settlement  at, 
16. 

Tariff  issue,  divides  labour 

party,  75. 
Tasmania,  9. 
Taxation,  of  land  in  New 

Zealand,  105;  of  incomes, 

106. 
Telegraphs  and  telephones, 

charges,  266. 
Teuancy  laws,  31. 


Trade  unions,  see  Unions. 

Trade  unionists,  see  Union- 
ists. 

Tropical  labour  in  Aus- 
tralia, 132-133. 

Unions,  industrial,  classi- 
fied by  common  employ- 
ment, or  by  trades,  202; 
equalise  wages,  66-67 ; 
historical  analogies  of, 
201 ;  part  of  arbitration 
machinery,  160;  social  in- 
fluence, 66. 

Unions,  rival,  203. 

Unions,  trade,  compared 
with  industrial  unions, 
64 ;  become  composite 
unions,  65 ;  congresses, 
58-60;  early  in  Austra- 
lasia, 57-58. 

Unionists,  preference  of 
employment  for,  172,200, 
224 ;  number  in  Australia, 
59;  proportion  of  popu- 
lation, 176. 

Wages  and  hours  of  work 
in  Australasia  and  the 
United  States,  51,  54, 
295. 

Wage,  equal  in  different 
occupations,  51-52;  liv- 
ing, enforced  by  the  gov- 
ernment, 150;  minimum 
and  standard,  230;  mini- 


Index 


327 


mum,  determined  by 
evidence,  145,  179;  reg- 
ulation in  Australasia 
distinct  from  that  in 
Europe  and  colonial 
America,  151. 

Wage  boards,  why  estab- 
lished, 139;  enforce 
determinations,  146-14.7; 
influence  on  sweating  and 
Chinese  competition,  147; 
influence  on  wages  and 
child  labour,  148;  and  a 


living  wage,  150;  and 
slow  workers,  149;  and 
the  theory  and  practice 
of  a  minimum  wage, 
144-145. 

Wakefield,  Gibbon— and  his. 
colonial  theories,  21. 

Watson,  J.  C.,  first  federal 
labour  premier,  96. 

Workers'  Compensation 
Act,  109. 

Workingmen  favour  com- 
pulsory arbitration,  215. 


FOURTEEN  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

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Renewed  books  are  subject  to  immediate  recall. 


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